EUR/USD Interest Rate Differential
The current policy-rate gap between Euro and US Dollar, and which side of EUR/USD earns the carry. Updated daily · as of June 18, 2026.
US Dollar carries the higher policy rate, so going short EUR/USD earns positive carry (swap); the opposite side pays it.
This is the current gap. The market trades the expected differential, which can move EUR/USD before any rate change lands.
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EUR/USD carry — frequently asked
What is the EUR/USD interest rate differential?
The EUR/USD interest rate differential is currently -1.50 pp — the Euro policy rate (2.25%) minus the US Dollar policy rate (3.75%). US Dollar carries the higher rate, so it tends to attract demand.
Does long EUR/USD earn or pay swap (carry)?
Going short EUR/USD earns positive carry, paid as the daily swap (rollover), because that side holds the higher-yielding currency (US Dollar). The opposite side pays the swap. Carry is simply the interest-rate differential turned into a daily cash flow.
Why does the expected EUR/USD differential matter more than today's?
Markets price the future, not the present. EUR/USD can move on a widening or narrowing expected differential before any actual rate change, as new data and central-bank guidance shift the expected paths of the Euro and US Dollar central banks. Today's gap is largely already priced in.
Does the higher-yielding side of EUR/USD always go up?
No. The rate differential is gravity, not a guarantee. It dominates in calm, risk-on conditions, but in a risk-off shock capital rushes to safe havens regardless of yield, and crowded carry positions can unwind violently.