Is there any historical data that anyone knows of that will tell you what the highest and lowest interest rate countries are and how buying the highest and selling the lowest would result in? Thx
It is called carry trading. Unfortunately, the pairs that have most significant difference in interest rates (more than 5%) also feature with very unstable price flow (too volatile) and big spreads, what makes profitable carry trading almost impossible. Take for example USD/RUB - 0.25 opposite to 8% interest rates. Spread in my Hotforex account shows 30 pips. Lowest among other brokers but still to dangerous to part in.. Playing with percents and expecting profit in the long run greatly outruns conventional near-term trading in terms of risks.
Code: DAILY YIELD at market price using 50:1 leverage Yield Ranking │ Yield Ranking long % │ short % │ WTICO_USD 1.355 │ NATGAS_USD 3.215 ZAR_JPY 0.707 │ SUGAR_USD 3.124 DE10YB_EUR 0.560 │ WHEAT_USD 0.620 SOYBN_USD 0.484 │ CORN_USD 0.616 USB30Y_USD 0.412 │ BCO_USD 0.438 NZD_CHF 0.401 │ EUR_NZD 0.358 NZD_JPY 0.401 │ USD_TRY 0.321 NZD_USD 0.392 │ EUR_TRY 0.307 TRY_JPY 0.324 │ GBP_NZD 0.307 NL25_EUR 0.314 │ CHF_ZAR 0.283 USB05Y_USD 0.307 │ USD_ZAR 0.279 NZD_SGD 0.300 │ EUR_ZAR 0.265 NZD_HKD 0.273 │ GBP_ZAR 0.245 UK10YB_GBP 0.272 │ EUR_AUD 0.215 AUD_CHF 0.258 │ USD_INR 0.212 AUD_JPY 0.258 │ GBP_AUD 0.164 NZD_CAD 0.252 │ XAU_NZD 0.147 AUD_USD 0.249 │ USD_MXN 0.144 AUD_SGD 0.157 │ XAG_NZD 0.136 US30_USD 0.138 │ USD_NOK 0.120 EU50_EUR 0.130 │ USD_PLN 0.097 AUD_HKD 0.130 │ XAU_AUD 0.090 US2000_USD 0.122 │ USD_HUF 0.089 AUD_CAD 0.109 │ USD_THB 0.089 SPX500_USD 0.090 │ EUR_NOK 0.085 USB10Y_USD 0.082 │ EUR_PLN 0.083 UK100_GBP 0.082 │ XAG_AUD 0.079 CAD_CHF 0.081 │ USD_CNH 0.075 CAD_JPY 0.080 │ EUR_HUF 0.075 USB02Y_USD 0.077 │ USD_CAD 0.072 GBP_CHF 0.026 │ GBP_PLN 0.063 GBP_JPY 0.026 │ EUR_CAD 0.037 GBP_USD 0.017 │ USD_CNY 0.031 XCU_USD 0.008 │ XAU_CAD 0.019 USD_CHF 0.000 │ XAG_CAD 0.008 USD_JPY 0.000 │ AUD_NZD 0.006 SGD_CHF -0.001 │ USD_CZK -0.001
Yes. For example though, AUD interest rates are higher than USD, I believe. So, should AUD/USD be going up instead of going down, as of late?
1 week,or less, of currency risk can wipe out a year of carry. At some point you have to close and net both. My language may not be right but the concept of the two components is real. AUD/USD is a good example of this.
This is a very complex trade and not one I would just wander into without a ton of quantitative research. The big money on the carry trade is made on the debt, not simply on the swap. The daily volatility in AUD/USD exceeds the annual carry. LOL. You do NOT want to do carry trades in an elevated risk environment like we have now.
Makes more sense to short nat gas since the US is trying to make the russian gas worthless. At 3.2% interest a day, you'll be rich in no time.