Unlike other currency trading strategies which are focused towards trading different pairs of currencies with a motive to earn a profit resulting from the changes in exchange rates in carry trading the main focus is to take advantage of different interest rates prevailing in different markets across the globe. The most attractive avenue for carry trading are the currency pairs having minimal changes in exchange rates & having substantial interest rate disparity prevailing in respective countries.
- Exchange rate stability:
- Economic Conditions:
- High Interest Rate disparity: