Once the Strait of Hormuz got disrupted, energy prices pushed the Federal Reserve to pivot, and the dollar narrative changed again— the underlying logic of arbitrage trades has never been static

Coin World Network news reports that Goldman Sachs says FX carry trades are expected to continue performing in the second half of 2026. Despite relatively low market volatility in the first six months of this year and relatively stable volatility for major currencies, changes in USD sentiment are still affecting the market. The conflict between the United States and Iran has shifted the narrative around USD depreciation; the closure of the Strait of Hormuz indirectly pushed energy prices higher, which in turn significantly affected the Federal Reserve’s policy outlook. Goldman Sachs noted that this year major currencies have been driven mainly by interest-rate differentials, and it expects FX carry trades to continue to outperform other drivers. Although the yen has been a clear choice in the previous few months, further upside for USD/JPY is limited due to intervention risk.