Carry Trade
Borrowing in a low-interest currency to hold a higher-yielding one, aiming to earn the difference in rates.
Also called carry
Borrowing in a low-interest currency to hold a higher-yielding one, aiming to earn the difference in rates.
Why it matters
The accumulated interest can be wiped out by a single sharp move in the exchange rate.
Related terms
- Interest Rate
- Currency Pair
- Leverage
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