Carry Trade
Submitted by fry2010 on March 7, 2008 - 20:37.
Hi everyone. I dont know much about this sorta thing, but wondered if this was a gd idea or whether it even works but here goes:
My broker doesnt offer AUD/CHF and I notice the interest difference is 4% with this pair. Am I right in saying that if I BOUGHT AUD/USD, and BOUGHT GBP/CHF I would effectivly be buying AUD/CHF? or have i got this completly wrong? I am sure I saw somthing like this on a website.
The other thing I notice is that they all offer attractive interest rates when being bought, so do you also gain the interest with AUD/CHF even if I have not physically bought this pair? Plus the interest earned of the main 2 pairs I bought to do this? I think I am dreaming a little here @ 10.25% interest. Plus they would have to be going upward.
Hope this makes sense,
Pete.
If your broker offers a positive interest on AUD/USD and GBP/CHF when pairs are bought, then you will earn interests on those pairs, but no additional premiums on AUD/CHF cross.
Currently carry traders look for profit opportunities with GBP/JPY pair when bought, and NZD/JPY also when bought. New Zealand Dollar sees lots of interest from Forex traders current days. Alf
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