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The Fed has pretty much given us a guarantee that money won’t be made within our shores on savings through late 2014. So in light of that, what are huge money managers to do in order to get some yield for their clients? They go where the yield is…and it’s not hard these days to figure out where that is. 

Below you’ll see a chart I got from which shows the interest rates on the major currencies of the world. You’ll notice that most are at 1% or lower. However, New Zealand has an interest rate of 2.50% and Australia has an interest rate of 4.25%. Well where’s the money going to go? To a zero interest rate nation…or to these guys? I’m betting on AUD and NZD. 


For the forex trader, the rollover interest is a huge difference. Again, I’ll take a snapshot from to show the FXCM rates per 10k mini lot bought. 

You’ll notice that most currencies pay a paltry 0 cents to 11 cents per day per mini lot traded. However, New Zealand pays 35 cents and Australia pays 79 cents per day per mini lot traded. 

So if you’re a money manager that manages billions of dollars, are you going to tie the money up in something that earns nothing or something that earns multiple times that? 

All things being equal, they’ll head to Australia and New Zealand in a heartbeat. So now that financial markets have stabilized for now, that’s where the money will go….away from the greenback and toward the Aussie and New Zealand dollars. 

So make sure you’re doing like the “big money” and heading some of your assets away from the buck and into greener, higher interest rate yielding pastures. 

Sean Hyman
My E-Book
Editor, Currency Cross Trader

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