In every forex transaction, the trade involves borrowing
one currency to buy another. Interest or swap is paid on the currency
that is borrowed and earned on the one that is bought.
As an example, if you are buying a currency with a higher interest
rate than the one you are borrowing, the net interest rate differential will be positive, and you earn interest for every day that the trade
remains open. This is sometimes called the carry trade. Position traders stand to gain a huge amount of swap when they hold trades for an
extended period of time.