I realize the equation is:
Contract notional value x (base currency interest rate - quote currency interest rate) / 365 days per year x current base currency rate = daily rollover interest debit/credit
But I'm a bit confused on how the "current base currency rate" factors into this a higher level view. For instance if the base currency rate increases the daily rollover obviously decreases and vice versa. Why is does the base currency affect rollover interest rate? ..is my main question. Is it because the interest has to be converted from the base currency to the quote currency so if the quote currency devalues then the interest you receive will lessen?
Contract notional value x (base currency interest rate - quote currency interest rate) / 365 days per year x current base currency rate = daily rollover interest debit/credit
But I'm a bit confused on how the "current base currency rate" factors into this a higher level view. For instance if the base currency rate increases the daily rollover obviously decreases and vice versa. Why is does the base currency affect rollover interest rate? ..is my main question. Is it because the interest has to be converted from the base currency to the quote currency so if the quote currency devalues then the interest you receive will lessen?