Be careful with the effect of unwinding carry trade

Commodities ended lower as investors square their positions in the market. Gold hits its lowest record in three and a half months and U.S. crude futures fell by nearly two percents last night.

JPY report

The JPY continues to strengthen against EUR and the USD as investors unwind their carry trades position in the midst of volatile stock market resulting from concerns about fallout in the U.S. subprime mortagage sector.

Warning from Japanese Finance Minister Koji Omi about weakness of the country’s currency was helping JPY even further.