Excerpt from:  Forex Training
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December 21, 2007

What is the Carry Trade?

Forex trading on the currency market
One of the most popular methods of currency trading is making use of the carry trade. It can be a good way to make money, but it is also consider a risky forex trading strategy, so you could also lose quite a bit.

The carry trade works when you borrow a low yielding currency, such as the Japanese yen or the swiss franc, and use it to fund the purchase of a high yielding currency, such as the New Zealand dollar or Australian dollar. You make money on the differences in interest rate.

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Topic Tags:  carry trade, currency market, currency trading, forex strategy, forex trading, forex trading strategy, Japanese yen, New Zealand dollar

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