foroom lluzers
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• Future interest rate expectations take precedence over the headline rate
• If a country has a high interest rate, but no further increases are expected, the currency can still fall.
• If a country has a low interest rate but is expected to raise interest rates over time, its currency can still rise
While it is easy for Forex traders to understand the logic of why investors move money from lower yielding currencies and assets to higher yielding assets and currencies. They may also believe that the simple mechanism of supply and demand is responsible for currency movement. However, this is only part of the story. The expectation of future interest rate increases or rate cuts is even more important than just the actual rates themselves.
To enter a trade :Look at stochatics 4 hours chart after anylysing fundamentals new .Either buy a monthly call or put option A T M or buy/sell futures with a wide stop of 200 pips.Run your profits until change in interest rates .expectations.The edge is the interest rate drivers.
The day trading systems and price action trading is for amateurs.
Those who have nothing to , read psychology threads and articles.This will help you.
Search on google for
trading currency for interest rates expectations
interest rate and exchange rate relationship
Higher interest rates attract foreign capital and cause the exchange rate to rise. The impact of higher interest rates is mitigated, however, if inflation in the country is much higher than in others, or if additional factors serve to drive the currency down.
https://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp548.pdf?3580ef9984c1f243be0de10811e5e5ef
• If a country has a high interest rate, but no further increases are expected, the currency can still fall.
• If a country has a low interest rate but is expected to raise interest rates over time, its currency can still rise
While it is easy for Forex traders to understand the logic of why investors move money from lower yielding currencies and assets to higher yielding assets and currencies. They may also believe that the simple mechanism of supply and demand is responsible for currency movement. However, this is only part of the story. The expectation of future interest rate increases or rate cuts is even more important than just the actual rates themselves.
To enter a trade :Look at stochatics 4 hours chart after anylysing fundamentals new .Either buy a monthly call or put option A T M or buy/sell futures with a wide stop of 200 pips.Run your profits until change in interest rates .expectations.The edge is the interest rate drivers.
The day trading systems and price action trading is for amateurs.
Those who have nothing to , read psychology threads and articles.This will help you.
Search on google for
trading currency for interest rates expectations
interest rate and exchange rate relationship
Higher interest rates attract foreign capital and cause the exchange rate to rise. The impact of higher interest rates is mitigated, however, if inflation in the country is much higher than in others, or if additional factors serve to drive the currency down.
https://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp548.pdf?3580ef9984c1f243be0de10811e5e5ef