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Why are forex traders interest rates so important?

Member Since Jul 09, 2020  9 posts TTSMarkets (tts_markets) Jul 27 at 12:44
When it comes to forex markets, there’s one factor that trumps anything else. Many people may think economic indicators can greatly move markets. Of course, you’ll often see stories about wages, prices, etc. making a big impact.

Interest rates, however, play a major role in these market movements. Looking at it, a job report may have a big impact on FX currency pairs. But it has such an impact because of how the report can influence interest rates.

Central bankers meet almost once a month (depends on schedule from one central bank to another). The central bank’s monetary policymaking staff assesses the economy at such meetings.

Assessment requires wages, labor market, GDP growth, etc. As you can see, these economic indicators tend to influence decision-making.

Thus, while economic indicators might seem to have a big impact in one way, the reason behind this impact is how they can shift interest rate expectations.

thnak you


Member Since Jul 27, 2020  5 posts Beagelv Jul 27 at 14:37
The forex market is ruled by global interest rates. They are probably the most important factor in determining the perceived value of a currency.


Member Since Jul 27, 2020  12 posts cardigan Jul 28 at 06:00
There is actually perfect explanation in here: https://www.babypips.com/learn/forex/interest-rates-101
Hope this helps.


Member Since May 05, 2020  4 posts ArakQW Jul 29 at 18:04
It's actually a very interesting and a bit complicated topic. I thought about it for a long time too and read some articles on the subject. But the best way to find answers to this question is on the babypips site. I liked this article very much too.

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