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Carry Trades Plunge As Risk Aversion Reigns

Wednesday, 27 February 2008 23:45:52 GMT

Written by John Kicklighter, Currency Analyst

The economic docket was light for the low yielding Japanese yen and Swiss franc, through their aggressive advances would not have suggested a shortage of scheduled fundamentals. Instead of economic indicators, traders’ interest in these carry trade favorites came along with a broad pull back in risk appetite. Growing fears of an economic recession (or worse, stagflation) was a particularly ominous sign for the global economy. A similar sentiment was measured in equities and the increasingly speculative energy market.

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