A strategy employed in currency trading, whereby an investor sells a currency with low interest rate and buys a currency with a high interest rate so as to benefit from the interest rate differential of the two currencies. Profits are usually maximised by the use of leverage.
Did you know?
Telephones and telex used for trading quotes were replaced in 1973, as Reuters introduced computer monitors.
Word of the day
"Front Running" - The illegal broker practice of promoting their own interests with foreknowledge of events that are likely to affect the market.
Always check if a broker is regulated before opening an account.