The fundamentals of the carry trade are to borrow in a low yielding currency and to lend in a higher yielding currency.
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| A SQUARE :: 14Aug07 Expertise on unwinding of the JPY carry trade |
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Category
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Currency
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Faculty
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Martin Wiedmann
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Expertise
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Foreign Exchange
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Author
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Sona Blessing
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Carry trades have always been a strategy currency hedge funds pursued. However, they were never as popular then, as they are now. When FX-volatility started its decline around three years ago (reaching historical lows this year) - carry trade emerged as one of the most rewarding strategies.
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