Tuesday, November 4, 2014
Why is Apple borrowing in euro's?
...because the European interest rates are so low. Apple will borrow in euros, sell the euros to buy dollars (called the "carry trade"), and return the dollars to shareholders. This is an increase in the supply of euros in the market for foreign exchange, which depreciates the euro relative to the dollar. In fact, a lot of speculators are betting on a stronger dollar or a weaker euro.