Effect of Interest rate on FX

T

trade2rich

Newbie

Messages

3

Likes

0

• Aug 5, 2008

• #1

Rising interest rate is good for a currency while falling interest rate is bad. What if the interest is on hold? The Federal Reserve should be keeping the interest rate unchange.

 

G

gc1

Well-known member

Messages

273

Likes

5

• Aug 5, 2008

• #2

It's more a matter of what people expect to happen on a rate decision vs. what actually happens.

 

littlemog

Active member

Messages

106

Likes

3

• Aug 5, 2008

• #3

Well, more probably a rally of sorts... given the recent dip of oil and commodities... see the market.

 

Gumping

Established member

Messages

876

Likes

152

• Aug 5, 2008

• #4

trade2rich said:

Rising interest rate is good for a currency while falling interest rate is bad. What if the interest is on hold? The Federal Reserve should be keeping the interest rate unchange.

Click to expand...

Your homework vis a vis this question: do a search on the phrase 'carry trade' .