Dislikedchester123, Thanks fro sharing the info. I understand some on the carry-trade but it does get confusing. I read that article which made more sense. However, it is still rather difficult to absorb this within our political situation at the present. Not to mention BOE and FED. Perhaps, .083x will be the HIGH of the Short Term Leg and MID will make a sharp run as sisse has indicated. I appreciate your map you posted as your FLIP is right around where I was looking as well now.Ignored
however, when someone says that euro going up via RISK, it means risk off.
re the carry trade (someone posted you a link), a carry trade is when someone sells a low interest rate currency and buys a higher rate currency. This only works when the spot rate does not move. In other words, the strategy is good for when there is no volatility. So for example, you buy/sell a forward and there will be a positive/negative interest rate component (depending on the IR differential), which you will accrue over the life of the deal. Take CHina. selling CNH is expensive and when done in the future, one really needs to have a view that it will weaken enough to pay for the IR component. If a lot of people are short EUR as a funding currency and suddenly there is an influx of volatility, then people have to square off their positions. (buy EUR).