Monday, July 2, 2007

Currency Volatility Increases on Demand for Insurance Against Rally in Yen

(Bloomberg) -- Volatility on major currencies may
extend a rebound from an all-time low because investors are
buying protection against a rally in the yen.

Traders are holding record futures bets that Japan's
currency will weaken versus the dollar, which raises the risk
that they will exit so-called carry trades that profit from yen
declines, said David Woo at Barclays Capital Inc. Concern about
losses in the riskiest segment of the U.S. mortgage market may
make investors more risk-averse, sparking a reversal of carry
trades and bigger currency swings.


Read more at Bloomberg Currencies News

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