BIS confirms continuing importance of carry trade
In the year to March 2007, low volatility and large interest rate differentials led to an increasing build-up of carry trades, the report said.
The low-yielding yen and Swiss franc were the main funding currencies for carry trades, the report confirmed. Meanwhile, the Australian and New Zealand dollars, Brazilian real, Hungarian forint and South African rand were the main targets.
“Carry trades arguably supported appreciating trends of the target currencies,” the report stated. “In May
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