Interest rates are important for the currency pairs as it helps the currency pair value to appreciate or depreciate. If you understand the importance of interest rate, then it will help to do fundamental analysis.
it is important to remember that it is the PREDICTION of interest rate changes that drives FX price changes. This is why all the other economic data moves the markets - it provides an early indication of how interest rates may change. So when rates actually change there may be only be a small change in price because the change is priced in
jimmyneeesham posted: The interest rates are important in forex because when the interest rates rise, the price of the national currency also rises and that currency gains value in the foreign exchange markets. The interest rates play a vital role and are important in the market movements.
Yes interest rate is important for a currency. Changing in interest rate can change the market trend. Traders should be watchful if rate is changed.