Hi, i'm quite new to this carry trade business. is it just a simple matter of buying into a currency pair with a high yielding currency such as AUD (against, say, the USD)? and keep earning interest (assuming, of course, that the exchange rate itself doesn't fall too much and therefore wipe out the interest earned).
if this is the case, it sounds like all i need to do is to buy AUD/USD when the pair dips to a strong support level, and maintain such an open position for as long as the bull trend continues, is that correct?
another question is about the interest rate. I thought the IR differential between AUD and USD offers the largest earning potential, but the funny thing is that, if i buy a mini lot (10000) of AUD/USD, the interest earned is 0.57, yet if i sell the same lot, the interest charged to me is 1.27. I dont really understand why there is such a large difference. What's even more interesting is that the interest earned on selling GBP/AUD is higher at 0.82, but even though the interest of GBP is higher than the USD.
please see the attached screenshot to see what i mean here.
Any advice on why is that so?
if this is the case, it sounds like all i need to do is to buy AUD/USD when the pair dips to a strong support level, and maintain such an open position for as long as the bull trend continues, is that correct?
another question is about the interest rate. I thought the IR differential between AUD and USD offers the largest earning potential, but the funny thing is that, if i buy a mini lot (10000) of AUD/USD, the interest earned is 0.57, yet if i sell the same lot, the interest charged to me is 1.27. I dont really understand why there is such a large difference. What's even more interesting is that the interest earned on selling GBP/AUD is higher at 0.82, but even though the interest of GBP is higher than the USD.
please see the attached screenshot to see what i mean here.
Any advice on why is that so?
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