There have been small reports in the Dutch press that the Central Bank here suspects (but has no proof for it) that treasuries of companies borrow lots of euro, change them for dollars and buy dollar-bonds, to profit from the difference in interest rates and the fall of the euro, and that this 'euro carry trade' (already known of the course is the 'yen carry trade') is an explanation for the fall of the euro. One newspaper calculated that gains for such operations would have been 12% (interest difference plus fall in euro exchange rate) during the first 5 months of this year only. Also, this week the Wall Street Journal Europe mentioned this as an explanation in an editorial. It would be interesting to know more about this, because centrale bankers, policymakers and 'the market' officially blame the small increase (0.4%) of the Italian budget deficit for the euro-slide, obviously to push even harder for (pro-cyclical) austerity policies in Italy, Germany and the rest of the EU. Did anyone know anything about this 'euro carry trade'?
Thanks, Robert Went