Fxpro Info

The return of the carry trade has been postponed - once again. Rising concern about European debt contagion and falling optimism about the global recovery may be encouraging more investors to move out of the euro. But instead of heading into higher risk commodity currencies, such as the Australian, New Zealand and Canadian dollars, they are moving into safe havens, such as the dollar, the yen and the Swiss franc. Given recent events, there is every reason this trend will continue. Data from China this week will only make matters worse if the figures confirm that the Beijing government has succeeded in slowing the economy down. This will only contribute to fears that the global economy could yet face a double-dip recession. In recent weeks, economic data from the euro zone and Japan have consistently been below expectations. And now, there is concern that U.S. growth could be stalling too after last Friday's disappointingly small rise in non-farm payrolls. Manuel Oliveri, a currency strategist with UBS in Zurich summed it up: "We expect growth expectations to adjust further, and one cannot exclude that stock markets may increasingly start to reflect the risk of a double dip recession." On top of this, contagion fears in the euro zone are growing.