Effect of Interest rate on FX

[trade2rich]

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.

 

[gc1]

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

 

[littlemog]

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

 

[Gumping]

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.

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