Overnight interest refers to the interest that needs to be paid or obtained by holding positions overnight. Every currency has its own interest rate, and every foreign exchange transaction involves two different currencies, so it involves two different interest rates at the same time. If the interest rate of the currency you buy is higher than the interest rate of the currency you sell, you can earn overnight interest ("positive overnight interest"). If the interest rate of the currency you buy is lower than the interest rate of the currency you sell, you need to pay overnight interest ("negative overnight interest").
Overnight interest may significantly increase your transaction costs or profits.
Most banks in the world are closed on Saturday and Sunday, so the overnight interest on foreign exchange positions is not calculated on these two days, but most banks still calculate interest on these two days. Therefore, three-day interest will be calculated for overnight positions in the foreign exchange market on Wednesday. Similarly, there is no overnight interest on holidays, but the overnight interest on the extra day is calculated two working days before the holiday. Generally speaking, the currency involved in the transaction will calculate the overnight interest of the holiday when it meets an important national holiday.
Note: If the open position is not closed before 5: 00pm new york time on Wednesday, the interest on that day will be calculated at three times the usual interest rate (about three days' interest). If the position is not closed before 4: 00pm on Friday, new york time, the interest income and expenditure of that day will be calculated as one day's interest, because the above three-day extension of the position has included the interest of the weekend.