C8 Adds Carry Trade to Hedge Platform

C8 Technologies, a London-based fintech founded by former BlueCrest Capital Management partners Mattias Eriksson and Ebrahim Kasenally, is adding FX carry strategies into its FX hedging platform, C8 Hedge.

The firm, which formally unveiled C8 Hedge earlier this year, says that as interest rate divergence re-emerges as an important driver in currency markets, users of the platform will benefit from improved returns and strategy diversification when using its active hedging solution.

The platform is managed by Jonathan Webb, formerly head of FX strategy at Jefferies, and previously an FX portfolio manager/proprietary trader at major banks and hedge funds, including HSBC, Credit Suisse and Bank of America. “At the heart of the FX carry trade is the idea that, as diverging economic performance is reflected in widening interest rate differentials, this interest differential can be harvested whilst currencies of better performing economies can also strengthen,” Webb says. “From 2011 to 2022 the carry trade produced little return as interest rates converged towards zero. Today, however, interest rates in most major economies are much higher and we see a wider divergence in economic performance across the G10 going forward. This will drive larger differences between interest rates in major economies and offer more scope for profitable returns.”

Eriksson, who is CEO at C8, adds: “Now is the perfect time to add FX carry strategies into the C8 Hedge platform, giving users the potential for improved returns as part of our tailored service. We are thrilled by the interest we have seen in the platform since launch, and we believe that adding this strategy to improve the way users hedge their currency exposures will further increase its appeal to those seeking to optimally manage their currency exposures with minimal fuss.”

The Full FX spoke with Eriksson and Webb at the launch of C8, the video can be viewed here.