Icelandic Krona (ISK)

Icelandic Krona (ISO-Code: ISK) is a very interesting trading opportunity.
The currency is fully convertible and the current Overnight Interest Rate is 15.25%.

Central Bank of Iceland

Furthermore, the curreny is very volatile (+/- 1% intra-day moves against EUR and USD are quite common).

Links:
ISK-Bonds
Article: Is there a commonality between Iceland, Turkey, South Africa, New Zealand and Australia?

Article 4: Interest Rates, Carry Trades, and Exchange Rate Movements

Article published in the Federal Reserve Bank of San Francisco Economic Letter in November 2006 concerning some practical aspects of carry trades.

http://www.frbsf.org/publications/economics/letter/2006/el2006-31.pdf

Article 3: Chances for a Carry Trade Unwind in 2007

An article written by Written by Antonio Sousa, John Kicklighter and David Rodriguez from November 2006 about the possibility of an "unwind" of carry trades in 2007.

http://www.dailyfx.com/story/special_report/special_reports/Chances_for_a_Carry_Trade_1163535045623.html

Article 2: The Influence of "Carry-Trades" in the Currency Market

Interesting article by Peter Ro focusing on some high-level issues of carry trades.

http://www.cnb.com/wms/insights/influence-carry-trades.asp

Article 1: The "Carry Trade" Economy

Very interesting article from Jim Puplava in Financial Sense, 4 August 2004.

http://www.financialsense.com/stormwatch/oldupdates/2004/0804.html

Definition: "Carry Trade"

There are lots of definitions of the term "carry trade".

However, one of the most general can be found on freebuck.com:
"Carry trade - The speculation strategy that borrows an asset at one interest rate, sells the asset, then invests those funds into a different asset that generates a higher interest rate yield. Profit is acquired by the difference between the cost of the borrowed asset and the yield on the purchased asset."

With respect to currency carry trades the definition has to be concretised:
"Investors borrow low-yielding currencies and lend high-yielding ones."

Welcome

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Everything about the world of forex carry trades!

The Carry Trader