I have been watching Bloomberg a lot this week, and have heard several times during this huge carry unwind that certain factors will result in an "involuntary end to the carry trade".
Is this true?
I don't understand what factors (other than a huge BOJ interest rate increase) could cause the carry trade to end. Please explain.
If this happens, will the market slow down appreciably? It seems like carry trade activity (both buying and sell-offs) drive the market. Or will other pairs cause market volitilty? I would hate to see the market slow down too much.
Is this true?
I don't understand what factors (other than a huge BOJ interest rate increase) could cause the carry trade to end. Please explain.
If this happens, will the market slow down appreciably? It seems like carry trade activity (both buying and sell-offs) drive the market. Or will other pairs cause market volitilty? I would hate to see the market slow down too much.