ead). It pays you a lower rate on your funds deposited, than it charges you to borrow! Now, obviously rates between countries vary enormousIf you propose to trade currency for the longer term, such as I do, rather than as a scalper who trades the market hundreds of times as day, then a key element to your success will be in understanding the carry trade. This provides trading opportunities due to the difference in interest rates between the various currencies.

Each country and therefore currency has its own interest rate, which is then converted into borrowing and lending rates by all the banks. When a bank lends you money the rates are always higher than when it borrows (like a spread). It pays you a lower rate on your funds deposited, than it charges you to borrow! Now, obviously rates between countries vary enormousl

, then a key element to your success will be in understanding the carry trade. This provides trading opportunities due to the difference in interest rates between the various currencies.

Each country and therefore currency has its own interest rate, which is then converted into borrowing and lending rates by all the banks. When a bank lends you money the rates are always higher than when it borrows (like a spread). It pays you a lower rate on your funds deposited, than it charges you to borrow! Now, obviously rates between countries vary enormous

interest rates between the various currencies.

Each country and therefore currency has its own interest rate, which is then converted into borrowing and lending rates by all the banks. When a bank lends you money the rates are always higher than when it borrows (like a spread). It pays you a lower rate on your funds deposited, than it charges you to borrow! Now, obviously rates between countries vary enormous

into borrowing and lending rates by all the banks. When a bank lends you money the rates are always higher than when it borrows (like a spread). It pays you a lower rate on your funds deposited, than it charges you to borrow! Now, obviously rates between countries vary enormousead). It pays you a lower rate on your funds deposited, than it charges you to borrow! Now, obviously rates between countries vary enormously. The interest rate in Japan is currently near 0%, and the New Zealand central bank rate is 7.25%, the Swiss is currently 2.0%, the Eurozone 3.5%, UK 5.25%, and the US at 5.25% Now the variation in currency from country to country allows us to use interest rates to our advantage in longer term trading.

If we take an example as follows: suppose we decide to buy the USD/JPY currency pair. With a BUY order we are long in US dollars (bought) and are short the Japanese Yen. Over a twenty four hour period on 10,000 dollars we might look to make $1.10