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Carry Trade: What is it and How Does it Impact the Financial Markets?
Markets this week are awash in a sea of red, with widespread carnage everywhere you look. With drops in crypto, oil, equities and Treasury yields – and with gold spot prices beginning to chart a downward trend – it seems nowhere is safe. The event that set things into motion seems innocent enough; a decision by Japan’s central bank to raise interest rates by a mere 0.25% on 31 July 2024 [1]. This sparked off a mass unwinding of carry trades across global markets, resulting in the dramatic sell-offs we’re witnessing. To understand why, we first need to take a look at a commonly-practised trading strategy, the ... (full story)
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- Posted: Aug 8, 2024 10:16am
- Submitted by:Category: Educational NewsComments: 0 / Views: 10,847
