In an ideal world, whenever we are looking for future carry trades, we want to go long a currency with a growing interest rate and fund it by shorting a currency with a falling interest rate. With a major shuffling of interest rate outlooks set to occur this year, there are many new trading opportunities that might emerge.
If currencies moved on interest rates alone, then long EUR/GBP or short GBP/CAD could be of interest. Of course, we know currencies do not move on interest rates alone, but when deciding between two equally attractive trades, the direction of future interest rates could very well be the deciding factor.
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