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  Latest
Differences between the Foreign Exchange Market and Stock Market May 23, 2022
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Interest Rate Announcement – Forex Calendar

Mira Team by Mira Team
August 3, 2020
in Article
Reading Time: 2 mins read
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The interest-rate announcement specifies the short-term target rate that the central bank will try to maintain in the future. Interest rates are one of the most important economic announcements on the calendar because the interest rate that a central bank sets for its economy has ripple effects that spread far and wide. You will also notice that many of the other economic announcements that we discuss gain some of their importance from the impact they have on a central bank’s decision-making process when it sets interest rates.

Interest-rate data are released in one key announcement that you need to watch:

Central bank interest-rate announcements: Official announcements from a central bank stating what the target short-term interest rate for the economy is going to be.

Impact on Trade Flows

Rising Interest Rates —> Increased Investment Flows Increased Demand for Currency Increase in Value of Currency —> Less Competitive Exports Decrease in Trade Flows

Falling Interest Rates -> Decreased Investment Flows —> Decreased Demand for Currency —> Decrease in Value of Currency –> More Competitive Exports —> Increase in Trade Flows

Impact on Investment Flows

Rising Interest Rates -> More Attractive Investment Returns->Increased Investment Flows

Falling Interest Rates —> Less Attractive Investment Returns —> Decreased Investment Flows

Impact on Money Supply

Rising Interest Rates —> Decrease in the Money Supply

Falling Interest Rates —> Increase in the Money Supply

Impact on Investor Fear

Raising Interest Rates (When Inflation Is Rising) -> Confident Investors

Not Raising Interest Rates (When Inflation Is Rising) —> Nervous Investors

Lowering Interest Rates (When the Economy Is Slowing) ->Confident Investors

Not Lowering Interest Rates (When the Economy Is Slowing) —> Nervous Investors

Typical Impact on the Currency

Rising Interest Rates -> Stronger Currency

Falling Interest Rates -> Weaker Currency

Tags: Fundamentals
ⓘ Some contents provide links to third-party news and current events as a convenience to you. We have not reviewed and don't endorse the contents of these sites. Please always do your own research. Mira FX does not endorse any companies, products or services which are represented on this article. Mira FX is not liable for any damage or loss, including but not limited to, any loss of investment, which may be based either directly orindirectly on the use of or reliance on such information. Before deciding whether or not to take part in foreign exchange or financial markets or any other type of financial instrument, please carefully consider your investment objectives, level of experience and risk appetite.

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