Excerpt from: Forex Training
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| August 22, 2007 | | Why interest rates matter to the FX market | One of the things that you might notice when reading up on forex trading news is the fact that interest rates are often mentioned as having bearing on currency trading. This is because interest rates are indicators of economic fitness, and this is important to performance on the FX market.
Interest rates can serve as an indicator of where an economy is going. A raise in rates usually coincides with a desire to keep inflation in check. Inflation is a sign of a rapidly expanding economy. Therefore, if interest rates go up to check inflation, it means that an economy is growing. This lends fundamental support to a currency in the FX market.
| Topic Tags: currency trading, forex trading, forex trading news, fundamental support currency, FX market, interest rates currency trading, interest rates FX market, performance FX market | |
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