If speculators set up a Carry Trade, they borrow the low interest currency and invest in a high interest currency. For example: you borrow USD 100 million at 1% and… read more →
Risk management is driven by two emotions: fear and greed. Fear results in selling risk, know as hedging. Hedgers want protection for negative price developments and render possible profitable outcomes.… read more →
A Central Bank task is to guard the stability of the financial system. A stable financial system is based on three pillars: stable prices, sound financial institutions and efficient payment… read more →
As I have stated in previous blogs, financial markets are driven by 2 emotions: fear and greed. If fear reigns, investors sell risky assets and enter safe havens, such as… read more →
In 2014, some companies blamed the high exchange rate of Euro to the US dollar for their low profits. But this is an excuse to cover up bad management. Let’s… read more →
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