If we take the Euro and USD pair (EUR/USD), and assume for our example that today’s interest rates in Europe are far greater than those in America, and we are holding a ‘Buy’ Position open overnight in the market
With a Buy position, we Buy the base currency (EUR) and Sell the quote currency (USD). And therefore need to deduct the interest rate of the USD from that of the Euro,
So if the Euro has its interest rates at 3% and America has its rates at 0.5% you will be paid 2.5% (3% - 0.5%) interest, on roll over.