Arbitrage trading is the practice of borrowing a currency with a low interest rate and then exchanging it for another currency to buy a financial asset with a higher yield or a higher likelihood of appreciation. When it is time to repay the loan, the money is lost if the borrowed currency appreciates relative to the currency of the purchased asset. If the borrowed currency depreciates, the money makes money. Some investors hedge currency risk, while others don't. In this case, since the ...