interest on pairs

Discussion in 'Forex' started by jetq, Jan 1, 2006.

  1. jetq


    hi, all,
    how do I find out which pair has positive interest? like EUR/USD, should I buy or sell to earn interest?

  2. mahras2


    The EUR pays lower interest than USD. Thus you would need to be long USD to earn interest. Therefore, you could short EURUSD to earn interest.

    Just know the interest rate differential between pairs to figure it out.
  3. gkishot


  4. Then you have to find a place to hedge which doesn't attract negative interest of the same magnitude.

    Are there ways of hedging a profitable carry trade with the same currency pair? I have seen incentive schemes whereby market makers waive the cost of carry (making them attractive as a hedging account) but these seem a bit suspect.

    Best regards
  5. Some rates