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Tuesday, June 17, 2014

ECB Negative Interest rates policy leads to increase in carry trades in euro

The European Central Bank's cut to its main lending rate and institution of negative interest rates earlier this month has spelled trouble for the euro. After hitting a 2-1/2 year high in early June, the euro has declined over 3%, due to monetary easing and increase in carry trades. Data released last week shows the net short position for the euro/dollar reaching its highest level since late May 2013.

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