Expectations that the Federal Reserve is likely to raise the benchmark US interest rate from 0.25 per cent within six months are prompting punters to scrap favoured long-short currency positions and adopt new ones.
In 2008 and the first half of 2009, investors took advantage of historically low US rates and the slumping greenback to borrow in dollars and buy a whole host of more attractive assets, purchases known as carry trades. These included assets ranging from Australian dollars and Asian equities to bonds.
