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Briefing

Carry Trade

Appears in: Asia/Pacific, Europe, Latin America, North America, Markets, Currencies

Critical Issues

Funding Currency Showdown: Will the Yen Supplant the Dollar?

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How Do Japanese Retail Investors Impact the Carry Trade?

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What is the Present State of the Yen Carry Trade?

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Will the Global Carry Trade Revive in 2010?

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What is the Forward Premium Puzzle?

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Background:

The carry trade, as narrowly defined, is the practice of borrowing a currency from a country where interest rates are low and then lending the proceeds in the currency of a country where interest rates are higher. The goal is to profit from the interest rate differential. The carry trade, as broadly defined, follows the same logic but would include flows of real money (not just borrowed money) from low-interest currencies to high-interest currencies. The carry trade is notoriously difficult to measure as it can be implemented through a wide variety of means, such as interest rate swaps and currency forwards.

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RGE Global Outlook Update


Table of Contents


Economic Outlooks:
 Global | U.S. | Japan
China | Eurozone
Germany | France | UK
India | Brazil


Global Issues
Growth & CPI | Commodities

Top 10 Most Read

1. Executive Summary: States of Flux: Stay Risk Averse
2. Approaching a Dangerous Stall Speed
3. The Big Picture: It Will Get Worse Before it Gets Better
4. U.S. Industrial Production Rises; Mixed Signals From Regional Surveys
5. Power Shortages Plague MENA
6. Wen Ex Machina
7. China's PMIs Signal a Moderation, Not a Hard Landing
8. U.S. Home Prices: Any Signs of an Impending Double Dip?
9. Commodities: No Pain, No Grain
10. Australian GDP Growth: Still Going Strong in 2010

FEATURED ANALYSIS

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