Hi all

Been pondering trying out a carry trade in EUR/TRY, chiefly because:
1) Obviously the interest rate differential is a healthy 5.95%.
2) EUR/TRY is close to long-time highs. If resistance above holds, then now is a very good time to get into short position.

Other observations
USD/TRY has a better interest rate differential (6.45%) however it's close to long time lows, so going short is from a reversal point of view extremely risky it would seem.
CHF/TRY would have an even better interest rate but is not tradeable (at least not on my broker.)

For EUR/TRY, opening, say, a 3:1 leveraged position (measured against account capital) would mean that you'd acrue effectively nearly 18% of interest on your actual capital, with a fairly low risk of ruin (the chances of EUR/TRY reaching 2.89 or thereabouts is pretty remote, given that the all time (?) high reached with the financial meltdown last year was only about 2.35, in other words about 8.75% away or so. In that light, even a 4:1 leverage should be reasonably safe, and would yield well over 23%.)

Comments?