Saturday
Feb022008
The Future US Dollar Carry Trade
Saturday, February 2, 2008 at 10:48PM
Most investors are familiar with the concept of the yen carry trade. It is where a trader will borrow say 1,000,000 yen from a bank in Japan at about a 1% interest rate. The trader then converts these yen into say US dollars and uses the dollars to buy bonds yeilding say 5%. Therefore the trader is looking at making a profit of 4% on his trade (5% - 1% = 4%).
This works well so long as the yen doesn't getter stronger against the dollar. Many professional currency traders would leverage their trade by say 10:1 and so make 40% profit instead of 4%.
The carry trade affects every area of the financial markets, including uranium. Please read the full article by clicking here.
This works well so long as the yen doesn't getter stronger against the dollar. Many professional currency traders would leverage their trade by say 10:1 and so make 40% profit instead of 4%.
The carry trade affects every area of the financial markets, including uranium. Please read the full article by clicking here.
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