Interest Rate Parity

Trading the Interest Rate Parity

A Guest Post by FXTM

One of the approaches that traders use to make profits in the forex market is known as a carry trade. This is when traders borrow one currency with a low interest rate and then use this to buy another currency with a high interest rate. For example, if the trader borrows currency A with a 1% interest rate and then uses this to buy currency B with a 5% interest rate, they can pocket the 4% difference – minus any other borrowing costs.

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FXTM
ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com
Our mission is to maximize the value our clients derive from their most precious commodity, “Time”!

FXTM

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com Our mission is to maximize the value our clients derive from their most precious commodity, "Time"!

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