monday market malady, page-2

And this excerpt together with the previous one seem to sum up the situation. Now to see how markets react today...

LONDON, July 27 (Reuters) - Sterling dropped sharply versus the dollar and hit a six-week low against the yen on Friday in a broad sell-off of high-yielding currencies, as investors cut some of their more stretched foreign exchange positions.

Along with the Australian and New Zealand dollars, sterling suffered from global market jitters as investors were caught up in concerns of a global credit crunch.

All three had been popular target currencies for carry trades in which investors sell low-yielding units like the Japanese yen in search of higher returns.