(Bloomberg) -- The New Zealand dollar dropped on
renewed concern that losses from U.S. subprime mortgages will
prompt investors to reduce holdings of riskier investments.
The currency, known as the kiwi, is a favorite for the so-
called carry trade, where investors borrow cheaply in yen to
invest in countries that offer higher yields. New Zealand's
record 8.25 percent benchmark rate is 7.75 percentage points
higher than Japan's and 3 points more than the Federal Reserve's
target, luring investors to the local currency. U.S. stocks slid
on concern more companies will be affected by defaults related
to subprime mortgages.
Read more at Bloomberg Currencies News
renewed concern that losses from U.S. subprime mortgages will
prompt investors to reduce holdings of riskier investments.
The currency, known as the kiwi, is a favorite for the so-
called carry trade, where investors borrow cheaply in yen to
invest in countries that offer higher yields. New Zealand's
record 8.25 percent benchmark rate is 7.75 percentage points
higher than Japan's and 3 points more than the Federal Reserve's
target, luring investors to the local currency. U.S. stocks slid
on concern more companies will be affected by defaults related
to subprime mortgages.
Read more at Bloomberg Currencies News
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