Carry trade
Updated 2026-09-20
Definition
A strategy of borrowing in a low-rate currency to invest in a high-rate one, earning the difference.
Why it matters
It works while the climate is calm; when fear arrives positions close suddenly and can cause big moves (typically strengthening the yen).
Practical example
Selling JPY (low rate) and buying AUD (higher rate) to earn the swap.
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Educational content, not financial advice. Trading involves risk.