Investing in Currencies

Portable currency, plenty of risk.© Ljupco—iStock/Getty Images, © SimpleImages—Moment/Getty Images; Photo illustration Encyclopædia Britannica, Inc.It’s one of the key components of capitalism: Accessing money as cheaply as possible and seeking the highest possible return. Companies issue stock and bonds to investors, then use the money to fund their business enterprises. Banks attract deposits from savers by paying interest, then loan it out at higher rates in the form of mortgages, auto loans, and business loans.This strategy is called a carry trade, and although it can be quite lucrative for those...