What is a currency carry trade?

#2
What is a currency carry trade?
The carry trade is one of the most world popular dealing strategies in the currency market. The most popular carry deals include buying currency pairs like the Japanese yen /Australian dollar and New Zealand dollar/Japanese yen for the reason that interest charge spreads of these currencies pairs are extremely high.

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rangarajan

Well-Known Member
#3
A plan in which an investor sells a certain currency with a relatively low interest rate and uses the funds to purchase a different currency yielding a higher interest rate. A trader using this strategy attempts to capture the dissimilarity between the rates, which can frequently be substantial, depending on the amount of leverage used.
Can u pl discuss in more detail with a Hypothetical/Real example explaining interest rate,dissimilarity,leverage,identifing the pair,etc
 

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