| Foreign exchange is creating opportunity. The dollar is back pushing towards a new secular high, with its trade-weighted index passing 99 for the first time since April and threatening a new decade-long high. Meanwhile, short-term European interest rates have gone negative, and the European Central Bank appears minded to push them even lower.
That should provide the ingredients for a classic carry trade, along the lines of the “yen carry trade” that helped keep the Japanese yen cheap for years before the 2008 crisis. Borrow and sell a low-yielding currency (thereby helping to push it downwards), park in a higher-yielding currency, pocket the difference (or “carry”) and relax...............................................Full Article: Source
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