Currency as an Asset Class In Forex!!! (Join my telegram group for joining expert’s discussion t.me/BOproFAQ) There are two distinct features to currencies as an asset class: 1. You can earn the interest rate differential between two currencies. 2. You can profit from changes in the exchange rate. An investor can profit from the difference between two interest rates in two different economies by buying the currency with the higher interest rate and shorting the currency with the lower interest rate. Prior to the 2008 financial crisis, it was very common to short the Japanese yen (JPY) and buy British pounds (GBP) because the interest rate differential was very large. This strategy is sometimes referred to as a “carry trade.” Why We Can Trade Currencies in Forex? (Access my website’s newsfeeds by following this link http://feeds.feedburner.com/BOBrokerReviews) Currency trading was very difficult for individual investors prior to the internet. Most currency traders were large multinational corporations, hedge funds or high-net-worth individuals because forex trading required a lot of capital. With help from the internet, a retail market aimed at individual traders has emerged, providing easy access to the foreign exchange markets, either through the banks themselves or brokers making a secondary market. Most online brokers or dealers offer very high leverage to individual traders who can control a large trade with a small account balance. #NMBO288

Currency as an Asset Class In Forex!!!

(Join my telegram group for joining expert’s discussion t.me/BOproFAQ)

There are two distinct features to currencies as an asset class:

1. You can earn the interest rate differential between two currencies.
2. You can profit from changes in the exchange rate.

An investor can profit from the difference between two interest rates in two different economies by buying the currency with the higher interest rate and shorting the currency with the lower interest rate. Prior to the 2008 financial crisis, it was very common to short the Japanese yen (JPY) and buy British pounds (GBP) because the interest rate differential was very large. This strategy is sometimes referred to as a “carry trade.”

Why We Can Trade Currencies in Forex?

(Access my website’s newsfeeds by following this link http://feeds.feedburner.com/BOBrokerReviews)

Currency trading was very difficult for individual investors prior to the internet. Most currency traders were large multinational corporations, hedge funds or high-net-worth individuals because forex trading required a lot of capital. With help from the internet, a retail market aimed at individual traders has emerged, providing easy access to the foreign exchange markets, either through the banks themselves or brokers making a secondary market. Most online brokers or dealers offer very high leverage to individual traders who can control a large trade with a small account balance.

#NMBO288

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