We examine how the global carry trade affects the dynamics of spot exchange rates and interest rates across 13 countries between 2000 and 2011. Our model identifies the weekly carry trade position in each currency by matching data on forex trading flows with the predictions of a dynamic portfolio allocation problem that exploits the predictability in excess currency returns (deviations from uncovered interest par-ity). We then use this position data to examine the global carry trade and its affects from 2001, through the world financial crisis, until the end of 2011. This analysis produces two surprising results. First, in nine countries the order flows driven by the carry trade are an economically significant driver of eurodollar interest differentials (vs. U.S. rates). Second, the carry trade only affects the dynamics of spot exchange rates insofar as it is contributes to total forex order flow; (i.e., flows generated by the carry trade and all other trading motives). These findings contradict the conventional view that sudden large movements in exchange rates are attributable to forex trading generated by the carry trade. They suggest, instead, that the effects of the global carry trade are primarily concentrated in bond markets. Joint with Martin D. D. Evans.