As the inflation numbers cool down, there are strong signals that the interest levels set by central banks have hit their peaks, and that the interest rate hikes may soon be coming to an end. The market fully anticipates that many countries will start to commence their interest lowering cycle in the middle or latter half of the year. As interest rate differences begin to narrow, the overnight interest from carry trading will start to diminish. As of 31st Dec 2023, the interest rate of USD is 5.50%, CAD 5%, EUR 4.5%, and GBP 5.25%, identical to those at the end of 2023Q3. In terms of low interest rate currencies, JPY and CHF continue to maintain relatively lower interest rates of -0.1% and 1.75%, respectively.

The differences in the tightness of the interest rate policies have resulted in interest rate differences amongst various currencies. As a result, by holding relatively high interest rate currencies and/or shorting relatively low interest rate currencies overnight, you will be able to generate a positive overnight interest rate income.

Z.com Forex provides ultra competitive spreads to clients. With the use of leverage, clients may increase potential returns while keeping trading costs to the minimum. You may not only earn profits from trading FX, but also interest rates. Using the USD/JPY pair, for example, the daily interest rate return for each lot is HKD12.20, and the required margin is only as low as HKD3,908.