I can’t remember how long it’s been since I was hyping the Yen carry trade (though a browsing of the ForexBlog archives indicates 2 years). Upon the outset of the credit crisis, forex markets went haywire, and one of the main “beneficiaries” was the Yen, which soared as carry trades were unwound. Now, however, a similar [...]

Currency trading on the FX market

The carry trade is unwinding quite quickly today, with risk aversion sending investors hurrying toward safe havens. A great deal of concerning news is weighing on the carry trade.

For the most part, investors remain fixed on the drama playing out in Greece. Moody’s is warning that another credit downgrade could be coming for the country if austerity measures aren’t adhered to. However, the government may find it difficult to adhere, since the public is protesting vociferously.

Another issue is the fact that Britain continues to struggle. National debt is mounting, and the Bank of England acknowledges that quantitative easing may be needed again going forward.

With all of these concerns, it is little wonder that the risky carry trade is being unwound in favor of more stable positions and safe haven currencies.

See AlsoEconomic Data and Forex TradingCurrency trading on the FX market

After the impressive rally in the US Dollar at the end of 2009, many market observers predicted that the end was near for the Dollar carry trade. That’s because volatility is the sworn enemy of carry traders; whenever there transpires a sudden change in direction in a funding currency, investors will usually race for the [...]

With so much to think about these days, I havn’t spent much time poring over foreign exchange reserve statistics. Apparently, this is to my detriment, as there have been a number of important developments on this front, some of which carry far-reaching forex implications.
I’m guessing a lot of you are probably in the same boat [...]