Forex glossary

Carry trade in Forex

A clear definition of Carry trade, with practical context for reading markets and making better trading decisions.

Level 7 · Connect News to MarketsRisk management

Definition

A strategy that seeks to benefit from the interest-rate difference between two currencies, while accepting exchange-rate risk. The swap is only one part of the outcome.

Practical forex example

Buying a higher-yielding currency against a lower-yielding one is a carry-trade idea.

Why Carry trade matters

Understanding Carry trade helps traders interpret market information, plan decisions, and manage risk with more context.

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