💱 Carry Trade Calculator
Estimate the profit or loss from borrowing a low-interest currency to invest in a higher-interest one, including exchange rate movement.
What is a currency carry trade?
A carry trade involves borrowing money in a currency with a low interest rate and investing it in a currency with a higher interest rate, profiting from the interest rate difference (the ‘carry’). The main risk is that exchange rate movements can wipe out or exceed the interest gained.
How this calculator works
We calculate the interest earned on the high-yield currency and subtract the interest cost of the funding currency, based on your notional amount and holding period. We then add the estimated dollar impact of any exchange rate change you enter over that period.
This calculator is for general educational purposes only, is not investment advice, and simplifies a strategy that carries significant real-world currency and leverage risk.