Tag: online forex trading

Interest rate differentials impact the flow of capital across global markets. Investors tend to move their funds into countries with higher interest rates to earn better returns, a phenomenon known as the carry trade. This strategy involves borrowing a currency with a low-interest rate and investing in a currency with a higher rate, profiting from the rate differential. For example, if the Japanese yen (JPY) offers a near-zero interest rate while the US dollar (USD) provides a 5% return, traders may borrow yen to purchase dollars, driving demand for the...