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ghafoorazeemi

At the moment, whAt is the best currency pair to do carry trade?

over 4 years ago

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Cyclopip

This past year, the AUD and NZD pairs have been the "currency performers" of the year. After all, they've gained about 40% and 50% respectively against the USD! Much of the reason has been because of their high interest rates, which are the highest amongst the major currencies. This has helped the two currencies gain a superior yield advantage over other major currencies. However, take note that in recent weeks that the USD has been gaining some momentum on reportedly better fundamentals. It will be interesting to see how this plays out in 2010.

over 4 years ago

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DarthTrader

There are several pairs you can do this with right now.AUD pays 3.75% vsJPY .10%USD .25%CHF .25%CAD .25%GBP .50%Caution, the carry trade is not a simple as just grabbing some interest differential. There are times when the higher yielding country like the AUD will lose value in principle against the other pairs, like right now and you will lose BIG time with the carry trade. Make sure BOTH the interest rate and the trend price is moving are in the same direction.

over 4 years ago

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ForexGump

Note that a carry trade strategy is only effective, for example for AUDJPY, if its price or the exchange rate is stable or rising. While you may still earn from the interest rate differential between the two currencies, your principal could dwindle if the pair is trending downwards.

over 4 years ago

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