for example, Swiss Franc (CHF) Negative spreads with almost all currencies, This means going long "Swiss Franc" Traders can expect negative overnight interest rates. on the other hand, If someone goes short on it, Positive overnight interest rates can be expected when holding positions overnight. in contrast, Going long on the pound may affect the euro, The Japanese yen and Swiss franc generate positive overnight interest rates, And when it comes to the US dollar, Canadian and Australian dollars generate negative overnight interest rates.
Overnight foreign exchange rates are also very important for hedging purposes. If a trader opens a position, Expected market trend has not yet begun, They can consider not closing the first position, Open another position in the opposite direction. This is usually referred to as "Lock up hedging" . The low overnight interest rate spread between banks can help minimize the cost of maintaining such positions to the greatest extent possible.