Post Why should you as a trader pay attention to interest rates?

Jul 28, 2020 at 08:43
832 Angesehen
16 Replies
Mitglied seit Jul 09, 2020   20 Posts
Jul 28, 2020 at 08:43
The general rule is that, as interest rates rise, they tend to increase demand for the currency. Due to higher interest rates, major investors tend to follow fixed-rate currencies.

Yet interest rates don’t just exist. Investors also tend to consider various other aspects such as geopolitical factors, economy overall stability, etc. Interest rates in large developed economies have not increased higher than 3% in recent years.

But if you look at developing economies, you can see higher interest rates. Developing economies typically have interest rates of at least 5%, if not more.

One reason for this is that developing economies tend to attract investors. In exchange for higher interest rates, developing economies can use the money to spend on infrastructure or debt financing.

There’s also a risk with higher rates. Most developing economies have no stable geopolitical scenario compared to developed economies. This in itself creates investor risk.

Returning to developed economies where interest rates aren’t that high, even 2% is sometimes considered a good return.

Investors looking for lower risk, but a slightly higher reward tends to chase higher-rate currencies
Mitglied seit Mar 22, 2018   13 Posts
Jul 28, 2020 at 11:03
With interest rates close to 0% in developed countries (and likely to stay that way for many years). Haven't interest rates lost their importance. It is the CHANGE in interest rates that can drive currency changes and as rates are expect to remain the same in all developing countries this is likely to have no impact on fx prices
Mitglied seit Jul 09, 2020   20 Posts
Jul 29, 2020 at 08:31
Thanks for your information
and keep with touch
Mitglied seit May 13, 2020   128 Posts
Aug 12, 2020 at 09:11
In order to control the situation and further your profit, of course, you need to focus on interest rates.
Mitglied seit May 14, 2019   30 Posts
Aug 22, 2020 at 08:44
Thank you, this is really helpful information.
Mitglied seit Jul 20, 2020   341 Posts
Nov 21, 2020 at 19:15
Interest rates help you to fix your profit margin. otherwise, you can not set your goal.
Mitglied seit Apr 15, 2020   219 Posts
Dec 11, 2020 at 10:55
When there is a rate hike, the currency will appreciate, which means that traders will buy. And when there is a cut, traders will sell and buy currencies with higher interest rates. Once a trader has determined the market movement, it is crucial to place the trade carefully
The more your practice, the more you learn.
Mitglied seit Aug 17, 2020   123 Posts
Dec 14, 2020 at 05:34
The modification of interest rates also have an impact on the economy. Lower interest rates can stimulate the economy as it is cheaper to borrow money. Higher interest rates do the opposite and this way they play a role in controlling inflation.
forex_trader_2047425
Mitglied seit Dec 15, 2020   4 Posts
Dec 16, 2020 at 21:23
I think the vast majority of traders on MyFxBook are day traders, and interest rates would not be much of a factor at all for those. My trades are a few minutes to one hour long.
Mitglied seit Oct 27, 2020   26 Posts
Jan 07, 2021 at 04:21
Good insight. Thank you for sharing this here. Will be beneficial for newbies as well as other traders. Keep sharing more.
Mitglied seit Nov 23, 2020   46 Posts
Feb 12, 2021 at 08:11
Sometimes, with such advice, you can really understand a lot.
Mitglied seit Mar 17, 2021   536 Posts
Apr 30, 2021 at 18:33
If you want to make a good trading career, you have to keep concentrate on everything in this market.
Mitglied seit Nov 16, 2020   55 Posts
May 09, 2021 at 09:52
It is very important to be able to understand and understand all that affects him and how this may affect your trading.
Mitglied seit Jul 23, 2020   759 Posts
Sep 07, 2021 at 15:05
Follow the economic calendar. That is all to find.
Mitglied seit Jul 23, 2020   869 Posts
Sep 08, 2021 at 15:03
There are many factors that influence the market, interest rates are one of them.
Mitglied seit Jul 19, 2020   751 Posts
Oct 05, 2021 at 16:01
Interest rate plays a big role Forex market. It can even change the trend of a currency. The impact of interest rate is on whole economy of a country. That's why.
Mitglied seit Dec 28, 2019   18 Posts
Nov 30, 2021 at 07:31
The changes of interest rates are directly affect the price of particular assets. Mainly, it concerns all the assets, but cryptocurrency isn't so affected by the changes of interest rates. When you have a growing market, the upgrade of interest rate can easily turn bullish trend into bearish one just for couple of hours. A lots of traders would lose their money and their accumulations. In my opinion, interest rate is the key indicator on the market and thus, the US government understands it. They didn't change interest rate couple of weeks ago and it's good.
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