Carry Trade Loss 2.8% as Dollar Fails to Weaken on Fed

Central bankers will get a lot less bang for their buck, pound, euro and yen as they struggle to stimulate flagging economies, trading strategies in the $4 trillion a day foreign-exchange market suggest.

The UBS AG V24 Carry Index, which measures returns from borrowing in lower-rate currencies to buy higher-yielding ones for so-called carry trades, has fallen 2.8 percent from a four-month high on Aug. 9. Bloomberg Correlation-Weighted Indexes show the worst-performing major currency in the past month was the Australian dollar, typically a beneficiary when investors are bullish on the economy because the nation has the highest interest rates among developed economies.