Bernanke had its first Conference today in which he held to the idea that the Fed would remain unusually lax by keeping the cheap dollar, including a renewed interest in the forex carry trade for pairs of press labels ever.
Carry trade is one of the opportunities for the most basic money for investors. A portage is essentially borrowing in currency to lend to another. The AUDUSD and NZDUSD are pairs of popular currency for this job.
Banking on the carry trade is an easy task with the current policy of the Fed. The Federal Reserve kept at low rate, which means traders forex can borrow at low prices to the United States and invest money when returns are better, such as the New Zealand and the Australia.
Australia, for example, pays a whopping 4.95% annually. The United States, the interbanks are lending money at lower prices as. 15% per year.
Thus, investors can borrow $ 100,000 US dollars to 15% on the market Forex, investing in Australian Dollars to 4.95% and interest income annual 4.8% or $4,800 on foot, while no change in the exchange rates are carried out.
Carry trade AUDUSD presents an excellent opportunity to make serious cash on a dollar flows. With margin as high as 50: 1 for USA registered brokers forex running, investors who adopt this carry trade may purchase $100,000 USD for a small expenditure of $2,000. Thus, the annual return, interest, operates at 140% per year, with the carry trade generating $4,800 per year in pure cash flow.
It is the reason why the carry trade will continue for at least a year, in which case the dollar should rally slightly that Bernanke began to raise rates. Until then, enjoy this trade, because with the possibilities of profit on interest rate spreads, it is illogical not step to employ this strategy even with a minimal margin.
Forex audusd, bernanke, transport of trade, us dollar
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