Returns from carry trades using the world's major currencies hit record highs, boosted by a sharp drop in market volatility, King Ten reported. An index measuring returns from such carry trades has risen 3.5% this year to a record high. Investors are still piling into such carry trades, betting against currencies such as the U.S. dollar and British pound with the Swiss franc and Japanese yen, taking advantage of interest rate differentials in different countries. The rare scenario of major central banks anticipating interest rate cuts coupled with a benign economic environment has reduced risks, with an index measuring global currency volatility falling to its lowest level since 2021. Van Luu, global head of foreign exchange at Russell Investments, said that the soft landing scenario promotes lower volatility in the foreign exchange market and is conducive to arbitrage trading.