National interest rates influence currency values in a variety of ways. The most direct way they accomplish this is by influencing the demand for a specific currency. When a country raises interest rates, it signals to investors that the economy is doing well and that they should invest in the currency of that country. Because of the increased demand, the currency's value will rise. Furthermore, by lowering interest rates, a country is essentially telling investors that it does not believe the economy is doing well and that they should invest elsewhere. Because of the decreased demand, the currency's value will fall.
Cookies
Cookies are small text files placed on your computer that are created by the websites you visit. Cookies are used to improve your user experience, enable functionality on the website, facilitate site security. Fxmerge website use cookies to provide the functionality you need to browse our site correctly. Fxmerge website issue cookies upon visiting our websites, unless the user has changed cookie settings in their browser to refuse cookies. Please note that with cookies switched off, many areas of our website and services will not be made available.
Member SinceJul 08, 2021
Posts 735
Sterling
Sep 22, 2022 at 00:36