Effects Of Interest Rates On FX Rates

FX rates movement are determined by supply and demand. So, one of the main factors determing rates movement is the currency pair countries’ interest rates. For example, if the US Federal Reserve bank were to lower interest rates, the US dollar will weaken against the other currencies. This is because holders of US dollars will earn less in interest payments due to the lower interest rates. Holders of US dollars will sell their US currencies and put them in other currencies that earn better interest, thereby weakening the US dollar.

Technorati : Currency Pair, Forex, Interest Rates
Del.icio.us : Currency Pair, Forex, Interest Rates

Focus On The Major Currencies

The daily trading volume for all FX currencies is about US$1.7 trillion. That’s more than the NYSE, NASDAQ and London equity markets combined. But unlike stock, six major currency pairs account for about 90% of the daily FX trading volume. You just need to concentrate all your efforts on analyzing these 6 major currency pairs:

Euro Currency / US Dollar - EUR/USD … “Euro”
British Pound / US Dollar - GBP/USD … “Cable”
US Dollar / Swiss Franc - USD/CHF … “Swissy”
US Dollar / Japanese Yen - USD/JPY … “Gopher”
Australia Dollar / US Dollar - AUD/USD … “Aussie”
US Dollar / Canadian Dollar - USD/CAD … “Loonie”

Technorati : currency pairs, forex, forex trading volume
Del.icio.us : currency pairs, forex, forex trading volume

Free World FX Market Hours World Clock

You’ll need this great widget from Yahoo to keep track of all the major Forex Markets opening and closing hours around the world. Goto http://widgets.yahoo.com/ and install the Yahoo Widget Engine. Then go here http://widgets.yahoo.com/gallery/view.php?widget=40896 to download the widget.

This is the Yahoo! Widget Engine version of OANDA’s popular FXMarketHours which shows the ‘trading hours’ of the major forex markets. Like the original tool, it takes bank holidays and weekends into account and allows traders to check the current status of all FX markets at a glance.

Technorati : Forex, Forex Trading Hours
Del.icio.us : Forex, Forex Trading Hours