What is Negative Carry Pair?

A Negative Carry Pair is when a trader holds a long position on a currency with low interest rates and shorts a currency with high interest rates.
Share on facebook
Facebook
Share on google
Google+
Share on twitter
Twitter
Share on linkedin
LinkedIn
Providing you with fundamental analysis and actionable trading insight every day.
Latest posts by Financial Source Team (see all)

A Negative Carry Pair is a trading strategy used on the forex markets in which a trader or investor holds a long position on the currency of a country with low interest rates and also shorts the currency of a country with high interest rates. This trading strategy initially incurs a loss because of the payment out for the short position will be more than what is gained for the long position. When a trader is willing to create a negative carry pair it normally means that the trader is confident that the currency with the lower interest rate will experience some very strong positive economic activity.

0 0 vote
Article Rating

ARTICLE SEARCH

CATEGORIES

TRADE WITH AN EDGE

A Financial Source subscription is just $97 per month. Cancel in two clicks.
*Limited offer. Normally $247.
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments