Interest Rates & Forex: What Moves Currency Pairs
How central banks, expectations, and surprises flow into FX prices — without hype.
18 min read
Introduction
Central bank policy and interest rate differentials influence capital flows. Traders watch expectations — not only the headline print — because markets often move on ‘surprise vs forecast’.
Rate differentials
Higher real yields can attract capital, all else equal. Pair this idea with technical levels for timing; rates explain bias, not every pip.
Practical takeaway
Around major central bank meetings, widen stops or reduce size unless your strategy explicitly trades volatility expansion.
FundamentalsRatesMacro
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