Carry trade

Updated: Aug 20, 2021

A currency trading strategy that involves selling a currency with a relatively low interest rate and using the funds to purchase a different currency with a higher interest rate. The difference in interest rates makes the strategy profitable provided the currency held does not depreciate.

Reference: Oxford Press Dictonary of Economics, 5th edt.

Sources & references
Risk disclaimer
James Knight
Editor of Education
James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.