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Carry Trades Take Off After Fed Decision

Wednesday, 31 October 2007 22:40:42 GMT

Written by Kathy Lien, Chief Strategist

The Japanese Yen crosses were the best performing currency pairs in the market today. Stocks took a wild ride today, translating into equally volatile price action in the carry trades. 

The Bank of Japan left interest rates unchanged last night, which was right in line with expectations. They also lowered their growth forecasts from 2.1 percent down to 1.8 percent for 2007. Labor cash earnings were also weaker than expected, making the fundamental bias for the Japanese Yen very clear. 
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