May 8, 2018 / 8:53 AM / 18 days ago

Carry trades pressured as dollar rally gains fresh legs

LONDON, May 8 (Reuters) - The dollar surged to a new 2018 high against its rivals on Tuesday as a recent rally in the greenback gathered fresh momentum, putting pressure on yield-seeking trades.

Against a basket of currencies the dollar index rallied above 93, taking its gains in the last three weeks to a chunky 4.3 percent and causing speculators to cut long positions in the euro and the Australian dollar.

The sell-off in these currency pairs rippled through the foreign exchange markets and prompted investors to unwind some of the best performing trades this year. They include buying the Norwegian currency against the Swedish crown, which on Tuesday fell half a percent. (Reporting by Saikat Chatterjee Editing by Tommy Wilkes)

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