When formulating forex trading strategy, it can be a good idea to look at interest rates. Interest rates play a role in currency trading, usually as an indicator of the underlying fundamentals of an economy. Interest rates and interest rate differentials can help a currency on the FX market.
"With the Bank of England on hold yesterday and ... at the
same time those downside warnings from Bernanke on growth, the
market continue to anticipate additional Fed cuts, so those
interest rates spreads continue to work against the dollar,"
said Jeremy Stretch, currency strategist at Rabobank.
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