Interest rate’s influence in the forex market

[Rambo35]

While currency prices are what the market is all about, interest rates have a direct effect on those prices. Therefore to be able to understand the current foreign exchange market you have to understand the current conditions of each individual interest rate. While economic and political conditions are also among the things that greatly affect the forex market there is nothing that affects it more than interest rates.

 

[nalu]

Interest rate have a very big influence on currency movement in forex because the higher the rate of return the higher the profit on a currency. Every trader need to do a thorough research analysis to avoid surprise rate moves and react to these moves properly when the inevitable happens.

 

[Fxpipper]

Yup, interest rate, inflation, job index, the whole bunch does have an imp effect on the markets but none more so than the interest rate..