You can also find out more about the following: Carry Trade Strategy It is well-known and widely used, particularly among institutional investors. It involves borrowing in low-interest currencies to invest into products that are denominated with higher-yielding currencies. As an example, a global firm of investment could finance its operations by issuing bonds in Yen at 0.70% for 10 years, then exchange the currency to invest in Italian bonds at 4.35%, or in a Pharmaceutical US share with a 6% return. It is quite a cautious strategy that works thanks to different cash flows. Another Interesting Point is that the currency being sold – which has a low interest rate – also has fundamentals that tend to make it depreciate against the counterpart, thus also resulting in the possibility of outright capital gains.
CHF The following are some examples of how to get started: JPY In the past, there have been certain currencies that were suited for this: an economy with high confidence, low interest rates in comparison to other advanced economies and a sufficient financing market. Investors tend to move their money into riskier assets in times of increased risk.
