Implications of The Dollar Carry Trade

The currency carry trade is a strategy where the investor sells a currency with relatively low interest rate and buys a different currency yielding higher interest rates. Investors can also use the funds to buy other asset classes in different countries which would give superior returns. The U.S. Government and the Federal Reserve has kept the interest rates at a record low level so that the U.S. economy recovers. According to the policy, keeping interest rates artificially low would ensureSource: Seeking Alpha RSS Feed