Are the dollar’s carry trade days numbered?

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Traders borrowing U.S. dollars to fund investments in other currencies should beware, with analysts expecting the greenback to strengthen and advising a shift to borrowing the euro instead.

“U.S. rates and the U.S. dollar may get a pop from an expected jump in April inflation,” Barclays said Monday in a note titled “Carry on, but don’t fund with USDs.”

Over the medium term, Barclays expects the U.S. inflation risks are to the upside, making it likely the greenback will continue to strengthen. Barclays expects the U.S. dollar index (DXY) to rise 5 percent by year end, with a 7.3 percent rise over 12 months.