With ZIRP and NIRP environments, and what with the highest major cross currency interest rate differential being the swissy/yen which is less than 3% difference, is carry trading still worthwhile?
Hi clemmo,
well, for some brokers no matter if you buy or sell but at night you will pay either way. Just like you said, there is basically no difference between interest rates for the different countries so the broker will charge you either way.
On the other side however, exotic currencies do offer some pretty good carry trade revenue. However exotics are a lot tougher to trade, so before you open any life positions, definitely do some demo trading.
for forex trader and esoecialy retail trader a carry trade is a time waister. on the question if carry trades are death: absolutely not. they are having an all times high since the financial crisis 2008/09
I agree with Turbo, above: I think that for retail forex traders dealing with the “majors”, it’s really far more likely to be a waste of time than anything else. You’d need to be involved with exotics to make it worth taking seriously, and (as mentioned above) that’s rather a different ball-game.
Do you mean Brazilian real and Russian ruble?
Not sure I understand what they mean by ‘reverse carry trade’.
"Investors are engaging in a type of ‘reverse carry trade,’ buying low-yield currencies for high-yield pairs and accepting small interest rate differential losses for potential large capital gains where central banks are cutting rates or buying more domestic bonds. "
They’re going long RBA and NZD because those currencies are rising compared to lower interest rate majors, despite the fact that they’re losing some interest gains? It’s not really a reverse-carry trade then, is it, just a trade? 
rouble/usd
rouble/eur
real/dollar
real/yen
yuan/rouble
etc etc
all currencies which have a big difference in basic interest rates set by their central banks.
but those currencies are very volatile and a carry trade may throws you out of the trade long before you earn anything on it.
aswell a cfd broker or ecn forex broker would not be your perfect partner for that out of 2 reasons.
1st. the “roll” is tiny. you dont earn enough
2nd. mist of those brokers used or mentioned on babypips dont offer those currency pairs.
you can try warrant contracts or futures on the regular stock exchanges which are products designed for this kind of trade and a long term holding policy.
Well, here is an example: NZD/JPY is downtrendig but the first currency has a higher interest rate, so you would earn negative swap/rollover if you went short; however, just like with bonds at the moment, speculators are aiming to earn profit from currency movements regardless of negative swap, as is the case with Yen pairs, because the pip gain can justify the cost of negative interest/swap…