Well, here its New Years, and Im sitting at home scratching my head,confused about currency carry trades. Theres not much else to do due to COVID. Im confused to how a currency pair is reflected on a graph. Here is My example. monies .
Begining of year End of Year
1 dollar/10 Lee |1 dollar/20 lee
|100,000dollar/1,000,000 lira||| 50,000|/1,000,000 lira
so on the market graph it shows drop in value or a rise in Value on the currency pair??? The Lee has depreciated in Value, So I think it shows a drop on the graph right?
My reading says that if the pair rises in value I gain pips I thought?
I dont understand the text below.
“However, nobody wants to Carry Trade U.S. Dollar vs. Turkish Lira (USD/TRY) despite the 22.5% interest rate difference between these two currencies. During 2017-2018, the value of USD/TRY jumped from 3.3925 to 7.0870, representing a 108.90% increase. So, if you borrowed funds at 2.5% from the U.S. and invested in Lira, you would lose a substantial amount despite the Lira’s higher overnight interest rate.”