The credit crisis had its effect on many currencies, but the Australian Dollar suffered among the heaviest losses. Why? Because the bursting of the credit bubble lead to deleveraging everywhere. That in turn caused traders to unwind their carry trades. Carry trades describe the action of selling a low yield currency for buying a high yield currency.

Look at this disaster:

Bold traders may enter a position , since the Aussie $ still yields around 5% more than the US$ and could be considered cheap now.

1 Kommentar »

1. 

   What a carnage!

   Kommentar von Broker (1 comments) — 16/10/2008 @ 10:22

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