U.S. favor the carry trade of hot money leaving a comeback.

<P> Few weeks ago, the market worried about the European sovereign debt crisis, optimistic about the U.S. economic recovery, double the level of emotional boost the dollar rose to its highest position 4 years. .</ P> <P>, however, did not last long, as investors questioned the sustainability of U.S. economic recovery, the trade-weighted dollar exchange rate decreased by 9% in two months. .U.S. dollar carry trade began to stage a comeback. .</ P> <P> Daxidabei </ P> <P> dollars in the past week against a basket of currencies fell more than 2%. .</ P> <P> rocker other end of the recent strong euro against the dollar rebounded, rising 1 to 4 above 1.32, a new high in March. .Pound against the U.S. dollar is approaching a ratio of 1.6, a half year high. .</ P> <P> currency strategist at HSBC Bank UK head David Bloom said: "If the money market is an individual, this time has been confined to a mental hospital ... not happy ... for a while, one will be sad to have not .quite unusual. We dramatic swing from one extreme to another extreme. "</ P> <P> employment indicators and a series of weak economic data and market the U.S. Federal Reserve could further ease monetary policy expectations, is to promote .The main reason the dollar lower. .2 Federal Reserve Chairman Ben Bernanke said the U.S. economy from a full recovery as well as "quite a long way to go." .</ P> <P> worries about deflation, helping to play down the role. .St. Louis Fed President James Bullard said branches of the U.S. economy at this stage "than the Japanese in recent years are close to ending any point in time." .</ P> <P> the Japanese economy since the 90s since the last century has been unable to get rid of the vicious circle of deflation. .</ P> <P> hot money away </ P> <P> investors selling dollars while betting on other countries and regions outside of the U.S. economic recovery. .Some Asian countries and regions because of faster growth, less debt, attracting a lot of hot money inflows. .</ P> <P> According to the British "Financial Times" data, the Indian stock market in July net inflows of foreign institutional investors 3.8 billion. .South Korea and China Taiwan stock market last month, a net inflow of foreign capital exceeded 20 billion dollars. .</ P> <P> hot money inflows push up the local currency higher. .Singapore dollar exchange rate is close to a record high, the Indonesian rupiah and Malaysian ringgit exchange rates are a record high of more than a year. .</ P> <P> This is for the U.S. to create conditions for carry trades. .Carry trade refers to the U.S. dollar, investors to low-interest dollars into high-yielding currencies, followed by speculation on higher-yielding assets elsewhere. .In view of the weak U.S. economic trend, the Fed low interest rates are expected to continue until at least the end of 2011. .</ P> <P> analyst difficult to accurately estimate the size of carry trade dollar. .Economic consultancy PiEconomics consultant Tim Lee said the dollar size of the carry trade may now be over 750 billion U.S. dollars, close to the 2004-2007 peak of the yen carry trade. .Resurgence of the carry trade may further weaken the dollar. .</ P> <P> carry season </ P> <P> some investors believe that Asian policy makers may take measures to support the dollar. .The recent rally in the yen to strengthen this view. .Japanese Finance Minister Ye Tian Jiayan 4, said the yen "side up", he will "pay close attention to market trends." .</ P> <P> However, analysts and investors expect the Japanese government will not use the direct purchase of U.S. dollars spent since 2004, made no moves to achieve the goal of pushing up the yen. .</ P> <P> the long term, the dollar carry trade success will depend on the continuing weakness of the U.S. economy and other national and regional economy has maintained strong growth. .</ P> <P> "It means a little tightrope," Li said, as long as the U.S. economic picture is expected departure from the growth lag, it could halt dollar carry trade, pushing the dollar higher. .</ P> <P> currency strategist at BNP Paribas head of 汉斯雷德克 said: "This is a summer market is hedging the season ... ... to fall, it will be the perfect time to turn the operation. ."</ P>.