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Carry Trade

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Description

An investment strategy where an investor borrows money in a currency with a low interest rate and invests in a currency with a higher interest rate to profit from the interest rate differential.

Carry trade involves borrowing in a currency with a low interest rate and investing in a currency with a higher rate, aiming to profit from the difference. Popular pairs for this strategy include yen crosses like GBP/JPY or NsD/JPY. This strategy requires careful consideration of currency stability and interest rate forecasts.

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