"...Tim Lee at pi Economics, who estimated the yen carry trade rose as large as $1,000bn between 2004 and 2007, says he finds it hard to get anywhere near China's estimate for the dollar carry trade of $1,500bn, saying that it stood between $500bn and $750bn at the end of the fourth quarter.
Marc Chandler at Brown Brothers Harriman says estimates of the dollar carry trade need to be taken with a large pinch of salt.
He says there are signs that some investors may be unwinding positions.
First, positioning figures from the Chicago Mercantile Exchange, often used as a proxy for hedge fund activity, have shown speculators have reduced their bets against the dollar to go long on the currency and now have record short positions in the euro.
Second, emerging market equity funds have seen their first outflow for three months as fears over monetary policy tightening in China, Brazil and India have increased.
However, Mr Chandler says the longer-term market appears not to have unwound their carry trade positions significantly, with the dollar's recent rally more probably attributed to events outside the US.
"While speculators in the futures market are short euro at record levels and have trimmed short US dollar positions, we suspect that the medium and longer terms investors are slower to reverse structural positions," he says.
"The dollar's recent strength appears to be more a function of bad news overseas than good news in the US..."
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