# How to earn foreign exchange spreads

2023/2/25 12:12:03 3Views How to earn foreign forex broker rebate program spreads?　　The Peoples Bank of Ch autorebateforexa has decided to lower the forexrebatebest rates on small deposits in US dollars, Hong Kong dollars forexbrokerrebateprogram Sw cashback forexs francs in domestic Chinese commercial banks since May 23, 2001 This is the sixth consecutive reduction in interest rates on deposits in US dollars and Hong Kong dollars since December 23 last year As different foreign exchange currencies have different deposit rates, as long as they are good at converting currencies with low interest rates into currencies with high interest rates, depositors can painfully reduce interest over the spread The loss of speculation how to make money experts free guidance bank gold and silver TD opening guide bank gold and silver simulation trading software set gold number desktop line intelligence tools assume that the one-year pound deposit interest rate of 55%, the same period the dollar deposit interest rate of 5%, the spread between them is 05% and then assume that the current exchange rate between them is ￡ 1 = 15 U.S. dollars, then if you do not take into account the exchange rate fluctuations, a The sum of principal and interest of a one-year deposit of \$ 1500 is \$ 1575 [1500 (1 + 5%)], converted into pounds for ￡ 1050 (1575 & divide; 15) but if the \$ 1500 first converted into ￡ 1000, the sum of principal and interest of the previous year of deposit is ￡ 1055 [1000 (1 + 55%)] In short, the same amount of deposit, deposit pounds to However, this can only be achieved if the exchange rate remains unchanged In other words, if by the end of the deposit period of one year, the exchange rate fluctuations between them is ￡ 1 = 148 U.S. dollars, then the sum of principal and interest of ￡ 1055 deposit in pounds converted to U.S. dollars is \$ 15614 (1055148), but less than the dollar deposit of \$ 136 (1575 - 15614), this is because the exchange rate difference between the pound and the dollar during the year amounted to 133% of the reason [(150-148)/150] so, in the case of the exchange rate difference is greater than the carry, arbitrage transactions are not worth the loss In fact, due to supply and demand, the foreign exchange market, high interest rates of currency forward exchange rates do fall, the exchange rate difference is greater than the carry situation does exist Therefore, in the arbitrage transaction, the exchange rate difference must be and carry factors to be taken into account, of course, if there is a forward foreign exchange market, people can use the swap method both to avoid the risk of exchange rate fluctuations, but also to earn carry, this practice is called offsetting arbitrage