The profits from carry trades have been reducing as the interest rate differences among Central Banks are disappearing. Falling demand for swing trades would help the dollar which is a favorite for funding the trades due to record low U.S. rates to continue the rally that resulted into 12 percent up than Euro in recent past.
There is no easy money left in carry trades. Most of the high yield currencies are over valued & low yield currencies undervalued. The profits from interest rates difference can be only around 2-3 percent.
As per sources the investors witnessed annual returns of around 14-16 percent due to interest rate differentials during year 2000 to 2005.
The global streamlining of yields has made the carry trades less attractive due to reducing profits.
The US dollar crossed its two weeks high against Japanese Yen (JPY) due to increase in orders for durable goods & improved demand for homes in the US market.
There is no easy money left in carry trades. Most of the high yield currencies are over valued & low yield currencies undervalued. The profits from interest rates difference can be only around 2-3 percent.
As per sources the investors witnessed annual returns of around 14-16 percent due to interest rate differentials during year 2000 to 2005.
The global streamlining of yields has made the carry trades less attractive due to reducing profits.
The US dollar crossed its two weeks high against Japanese Yen (JPY) due to increase in orders for durable goods & improved demand for homes in the US market.
0 comments:
Post a Comment