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

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

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

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In order to control the situation and further your profit, of course, you need to focus on interest rates.

Thank you, this is really helpful information.

Interest rates help you to fix your profit margin. otherwise, you can not set your goal.

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 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.

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.

Good insight. Thank you for sharing this here. Will be beneficial for newbies as well as other traders. Keep sharing more.

Sometimes, with such advice, you can really understand a lot.

If you want to make a good trading career, you have to keep concentrate on everything in this market.

It is very important to be able to understand and understand all that affects him and how this may affect your trading.

Follow the economic calendar. That is all to find.

There are many factors that influence the market, interest rates are one of them.

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.