The Australian dollar is the worst performing currency this week. It has lost about 3.5% against the greenback. This is its worst week in a little more than a year. Given that the dollar bloc and yen are the weakest currencies, it would seem to contradict recent media reports about how the carry trade is back. Carry trades by definition based on rate differentials not currency movement. High yield currencies can be bought on the basis of momentum not carry. Similarly the yen can be sold on momentum not simply as a funding currencies. Note that the Aussie's slide this week wipes out a year or more of carry. ... (full story)