Made Easy Forex

Q:  Can anybody explain what rollover fees are in Forex? I know they are the differences in overnight rates, but I still don’t understand them. I saw a chart that had different values for each currency pair, why are some positive and some negative? If this chart is accurate, should I just trade currency pairs with a positive rollover fee?

A:  If you hold a Forex position overnight, you pay or receive what is called a Forex rollover fee.The rollover fee is calculated by the difference in the Interest rate that applies to the two currencies in the currency pairs you are trading. If you buy a currency pair where the base currency has a higher interest rate than the terms currency, then you receive the rollover, and vice versa!