Carry trade backdrops can be some of the most attractive venues available to traders, in my opinion. Rates diverging between economies can increase the rollover or swap that’s earned or paid on a currency pair, and as that rate divergence grows so does the rollover or swap. If long the higher-yielder and short the lower-yielding currency, that rollover can be significant, and that can drive bulls into the side of the pair with higher yield that are looking to capture that rollover. And then as more traders build demand into that side of the pair, a bullish trend sparks that motivates even more to join the trend. And ... (full story)