Euro carry trade

11 01 2012

Many experts are pointing out that the euro is likely to assume the main role in the fresh carry trade revival trend. Last year’s worst performing major currency might be replacing the yen as the currency of choice for executing the so called carry trade process (which basically consists in borrowing in currencies with low interests rates in order to invest in other currencies with higher interest rates and profit from the interest rate differential), boosted by its downward trend observed during last months and rumors indicating that the BCE’s benchmark interest rates could hit 0.5% by mid-year 2012.