Carry Trade

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Frozen demand for risky positions such as the yen carry trade

The euro slipped to a six-week low against the U.S. dollar on Wednesday and
high-yielding currencies stayed weak as investors continued to unwind risky positions
on concerns that fallout from the U.S. subprime problems is spreading to other countries.
CNBC/Reuters August 14, 2007

Concerns that the days of easy credit are ending have frozen demand for risky positions such as the yen carry trade, and analysts said high-yielding currencies that have benefited from the strategy would stay under selling pressure.

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