That’s economic theory. Reality, however, is different. Traders do make profits in carry trades because, on average, the currency in the low-interest-rate country tends to depreciate rather than...

That’s economic theory. Reality, however, is different. Traders do make profits in carry trades because, on average, the currency in the low-interest-rate country tends to depreciate rather than appreciate and the currency in the high-interest-rate country tends to appreciate (due to excess demand for it) rather than depreciate.