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Is the foreign exchange overnight interest rate unchanged?

2023-12-12

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no. Changes in currency interest rates will also lead to changes in interest spreads, and this change will lead to changes in overnight interest rates. Generally speaking, in the most formal exchanges, the overnight interest rates change every day. Generally speaking, they cannot update the overnight interest rates every day, but they must update the overnight interest rates monthly or weekly.

Foreign exchange overnight interest rates are not static.

Changes in currency interest rates will also lead to changes in interest spreads, and this change will lead to changes in overnight interest rates.

Generally speaking, in the most formal exchanges, the overnight interest rates change every day. Generally speaking, they cannot update the overnight interest rates every day, but they must update the overnight interest rates monthly or weekly.

The amount of overnight interest depends on the size of the user's position in the market.

Depending on the type, interest charges may be paid or charged, and overnight interest is also called rollover charges. At approximately 5pm EST, if an open position is held, the account will deduct/earn interest fees on the open position.

How is overnight interest (inventory fee) calculated?

Overnight interest is when the open position on one settlement day is transferred to the next settlement date. If you hold an open position, your broker will automatically execute the opening of the next trading period.

The basic formula for calculating overnight interest is: "Overnight interest﹦actual number of lots placed×1 lot standard×exchange rate price (short and long prices are different)×number of interest accrual days×annual interest rate difference/360 days." However, in foreign exchange, some brokers provide a direct amount for the calculation of overnight interest, while some brokers provide an interest rate.

For example: the overnight interest quotes for selling and buying EUR/USD are: 0.52-0.62, which means that when the investor's position is to sell 1 lot of EUR/USD, the trading account will receive 0.52 US dollars; when If the investor's position is to buy 1 lot of EUR/USD, he will have to pay US$0.62.

The above information is provided by special analysts and is for reference only. CM Trade does not guarantee the accuracy, timeliness and completeness of the information content, so you should not place too much reliance on the information provided. CM Trade is not a company that provides financial advice, and only provides services of the nature of execution of orders. Readers are advised to seek relevant investment advice on their own. Please see our full disclaimer.

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Is the foreign exchange overnight interest rate unchanged?

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