Monday, June 25, 2007

New Zealand Dollar Falls as Stock Drop, Subprime Concern Hurts Carry Trade

(Bloomberg) -- New Zealand's dollar fell as
declining stocks and concern about losses tied to subprime
mortgages in the U.S. prompted some investors to unwind riskier
bets.

The currency is a favorite for the carry trade, where
investors borrow cheaply in yen to put their funds in nations
offering higher yields. New Zealand's 8 percent official cash
rate is 7.5 percentage points higher than Japan's overnight rate.


Read more at Bloomberg Currencies News

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