Overbought Equities, Including AI, Contributed to Carry Trade Unwind: Analyst

Don Ma
By Don Ma
August 6, 2024Business Matters
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The ripple effect continues from the unwinding of a popular trade. JP Morgan and UBS think the unwind is only 50 percent done. Investors are reacting to Japan unexpectedly raising interest rates, for the first time in 15 years. We spoke with Joseph Trevisani, senior analyst at FXStreet, about the unraveling of the carry trade and the unique factors that contributed to such a substantial selloff, including an overbought equities sector, like AI. Trevisani noted that the carry trade is a simple and logical idea, and he thinks so long as an interest rate differential exists the trade will continue to exist.