1/22/2010

As the U.S. dollar strengthens, the dollar carry trade that drove a rally in emerging-market equities last year is starting to fade, analysts said. Hedge funds and other international investors who borrowed cheap dollars at a low interest rate might be forced to reverse the process. As the dollar rises and, as expected, U.S. interest rates increase, investors might be forced to sell foreign assets to make their increasingly expensive loan payments, some analysts said.

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