Why buys EUR/AUD to pay interest for holding them overnight?
Posted: Wed May 08, 2013 8:33 am
Due to different in interest rate, AUD's rate is higher than EUR's rate.
Buying EUR/AUD, you need to pay interest for holding overnight.
Selling EUR/AUD, you are receiving interest for holding overnight.
In a logical sense, everyone should sell EUR/AUD for extra interest for holding overnight.
Does anyone know any market behavior on why EUR/AUD rises instead of falling down in market price? On the other words, people are willing to hold EUR/AUD by paying extra interest for holding them overnight.
Does anyone have any suggestions?
Thanks in advance for any suggestions
Buying EUR/AUD, you need to pay interest for holding overnight.
Selling EUR/AUD, you are receiving interest for holding overnight.
In a logical sense, everyone should sell EUR/AUD for extra interest for holding overnight.
Does anyone know any market behavior on why EUR/AUD rises instead of falling down in market price? On the other words, people are willing to hold EUR/AUD by paying extra interest for holding them overnight.
Does anyone have any suggestions?
Thanks in advance for any suggestions