Reversal in the works

FT.com reports that the global hunt for yield has dominated foreign exchange markets in 2005, with currencies backed by relatively high interest rates such as the US and Australian dollars and sterling outperforming low yielders such as the yen, euro and Swiss franc.

But according to Merrill Lynch at least, that pattern will break down in the next few weeks, ushering in an environment in which this established pattern not only breaks down but reverses.

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