USD/TRY watch: what are you watching?
The lira trades on domestic policy and inflation dynamics unlike any major — high rates, sharp devaluations, and intervention patterns of its own.
What's your read?
- the policy signals you're tracking
- how you manage the pair's gap risk
- whether the carry compensates for the volatility
Background: carry trade explained for the honest trade-off.
Background: The carry trade explained, and why it can unwind so quickly
Borrowing in a low-interest currency to hold a high-interest one can earn steady income, until the exchange rate turns. How carry works and where the risk hides.
What is a carry trade in forex?
Buying a higher-yielding currency against a lower-yielding one to earn the interest rate difference, usually received as a positive overnight swap.
Why do carry trades unwind suddenly?
They are often crowded. When markets turn fearful, many traders close the same positions at once, buying back the funding currency and pushing it sharply higher.
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