Crowded carry market threatens liquidity
LONDON & NEW YORK - The build-up in carry-trade positions could further strain liquidity over the summer when the dollar rebounds, speculate traders.
“The biggest risk to liquidity over the summer is in the turnaround of the dollar. There is not enough liquidity available to get out of crowded carry-trade positions,” said a head of foreign exchange trading at a global bank in New York.
Improved risk appetite since March has seen the dollar lose 16% against sterling to reach $1.6420 on July 3
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