What if you could borrow cheap, invest smart, and pocket the difference—all from your forex account? That’s the magic of a carry trade, and in 2025, it’s making a comeback.
With interest rates shifting—some dropping, others climbing—there is money to be made for traders like you. Whether you are new to forex or building your skills, this guide breaks down the carry trade, explains why it’s hot now, and highlights the best currency pairs to try on VT Markets. Let’s get started and unlock those rate-driven gains!
A carry trade is a simple forex strategy with a clever twist: you borrow money in a currency with a low interest rate, use it to buy a currency with a higher rate, and keep the difference—known as the “swap.” It’s like getting paid to hold a trade!
Imagine borrowing Japanese yen (JPY) at a tiny 0.5% interest rate and using it to buy Australian dollar (AUD) at 4%. If the exchange rate doesn’t budge, you earn 3.5% just by sitting tight. That’s USD 350 a year on a USD 10,000 trade, minus a few fees.
This isn’t about fast wins—it’s a slow-and-steady approach, perfect for patient traders. On VT Markets’ platform, you can easily spot these opportunities because the swap rates are right there in front of you. It’s a beginner-friendly way to dip your toes into forex profits without needing to be a market wizard.
So why is everyone talking about carry trades in 2025? It’s all about interest rates—and they are shifting in exciting ways.
Last year, Japan’s rates were practically zero, making the yen a favourite for borrowing. Now, at 0.5%, it’s still low, but other countries are widening the gap.
The US Federal Reserve might be trimming rates to 4% after a tighter 2024, whilst places like Mexico hold steady at a whopping 10%. These differences are the fuel for carry trades.
When central banks tweak rates, forex markets feel it. A wider gap between a “borrowing” currency and an “investing” currency means more profit potential.
In 2025, these shifts are creating a playground for traders who know where to look. It’s not just theory—rates move forex every day, and this year could be your chance to cash in.
Ready to put this into action? Here are three beginner-friendly currency pairs with solid carry trade potential in 2025. They’re chosen for decent interest rate gaps and enough stability to keep things manageable. Let’s break them down:
1. AUD/JPY (Australian dollar/Japanese yen)
Australia’s interest rate sits at a healthy 4%, whilst Japan’s is just 0.5%. That’s a 3.5% gap—pretty tempting! On a USD 10,000 trade, you could earn USD 350 a year in swaps, plus any gains if AUD rises.
The trick? Go long on AUD (buy) and short on JPY (sell). Keep an eye on commodity prices like iron ore—when they climb, the Australian dollar often follows. It’s a classic carry trade pair, and VT Markets makes it simple to track.
2. USD/MXN (US dollar/Mexican peso)
Mexico’s central bank is holding rates at an eye-popping 10%, whilst the US might ease to 4%. That’s a 6% difference—one of the juiciest around. With a USD 5,000 position held for a month, you could pocket USD 25 in interest alone.
Here, you’d go long on MXN and short on USD. Just watch out for sudden US news—like jobs data—that might shake things up. This pair’s a bit spicier, but the rewards could be worth it.
3. NZD/CHF (New Zealand dollar/Swiss franc)
New Zealand offers a steady 4.5%, whilst Switzerland’s rate hovers near 0%. That’s a clean 4.5% spread. A USD 2,000 trade could net you USD 90 a year if the rate holds. Go long on NZD, short on CHF, and you’re set.
The catch? Switzerland’s franc can jump during global panics as a “safe haven,” so timing matters. It’s a smooth option for learners, and VT Markets’ tools help you stay on top.
These pairs aren’t guarantees—exchange rates can shift—but they are a great starting point. On VT Markets, you can check the exact swap rates and even test them risk-free with a demo account. Why not give one a go?
Before you jump in, let’s talk risks. The biggest? Exchange rates can move against you.
If AUD/JPY drops 5%, that 3.5% interest gain disappears fast. It’s like lending a mate USD 100 and getting back USD 95—frustrating! Sudden rate changes from central banks can also flip the script.
But don’t worry—there are easy fixes. Set a stop-loss, like “exit if AUD/JPY falls 2%,” to cap your losses. Keep tabs on rate announcements using VT Markets’ economic calendar—think of it as your forex weather forecast.
And start small—maybe USD 100—to get the hang of it. With a bit of care, these risks are manageable, even for beginners. You’re not gambling; you are learning a craft.
The carry trade is back in 2025—borrow low, earn high, and let rates work for you. With Japan’s rates creeping up, Mexico’s standing tall, and others easing, pairs like AUD/JPY, USD/MXN, and NZD/CHF are prime picks. Risks exist, but VT Markets makes it easy to start smart.
Ready to turn interest rates into profits? Open a live account with VT Markets today and explore the “swap” column to see your potential earnings. Low spreads and real-time data help you practise risk-free. Why not plunge in, see how it feels, and make 2025 your forex year?
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