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Forex and interest rates: how do rate hikes and cuts impact currencies?
Interest rates are an important driver for forex markets so it’s important that traders understand the effects of hikes and cuts on currencies. Let’s look at how interest rates affect currencies and a popular forex interest rate trading strategy.
Pending Home Sales rounds out weaker housing data in US
If markets see the Fed cutting back the pace of rate hikes, we may see 10-year yields lower, and as a result, housing data may pick up again.
FOMC recap: Fed delivers 75bps, but Powell throws cold water on hawks
On balance, the Fed chief is coming off as relatively dovish...
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FOMC meeting preview: Traders looking for 75bps, Powell’s presser key
If the FOMC does, in fact, opt for a 75bps interest rate hike, Fed Chairman Powell’s accompanying press conference will likely have a bigger market impact than the decision itself...
US yield curve sees its deepest inversion since 2000: What does it mean for major markets?
If traders don’t have this scenario in their minds, they’re ignoring one of the biggest risk in markets right now...
NFP preview: Leading indicators slow while Fed poised to charge ahead
The leading indicators point to a slightly below-expectations reading in this month’s NFP report, with headline job growth potentially coming in somewhere in the 225K-325K range
Are SNB being ‘franc’ about a potential hike?
Comments from SNB’s president suggest the central bank might be closer to hiking rates sooner than some expect.
Markets pricing in central bank rate increases over the next year
Traders should watch the change in expectations of interest rates vs current rates.
Back from the dead? The revival of the FX carry trade
As inflation rises to multi-decade highs, some central banks are once again raising interest rates aggressively, suggesting that the carry trade could come back from the dead in the coming months.
FOMC meeting recap: Was that “Peak Hawkishness” for the Fed?
Traders may look at today’s press conference as marking “peak hawkishness” for the Fed, at least in the short term...
FOMC meeting preview: 50bps a “done deal” but balance sheet update will be key
Of course, with a 50bps move already fully discounted, the Fed’s interest rate decision is unlikely to be a market mover by itself...see what traders will be focused on instead!
How will the Russia-Ukraine conflict impact inflation?
The Russia-Ukraine crisis is pushing up prices of everything from oil to food and threatens to derail the global economic recovery from the pandemic.
Stocks that perform well when interest rates rise
When interest rates are rising, there are certain sectors and stocks that perform better than others – such as finance companies, consumer discretionary and gold miners. But when rates are high, this can change. Let’s take a look at the stock market performance when rates rise, and how to manage your positions.
How to use the currency carry trade strategy
A carry trade is a trading strategy that involves borrowing a low-yield currency and investing in a high-yielding asset to exploit the interest rate differential. Carry trades are most common in forex trading with traders borrowing the low interest Japanese yen to buy higher interest currencies. Learn what currency pairs work best and how to execute the strategy yourself in our full guide.
Could housing be the next shoe to drop?
Are home buyers rushing to buy ahead of a rise in interest rates?
Asian Open: US CPI at 40yr high sparks talk of emergency Fed hike
US inflation roared to 7.5% y/y and money markets are pricing in a double hike form the Fed, with some calls for them to start as soon as tonight.
How does inflation affect financial markets?
Inflation affects different financial markets in different ways, making it important to know how rising costs impact your trading positions. Discover what inflation is and how you can prepare yourself for high and low inflationary environments.
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How do interest rates impact financial markets?
Interest rates are a key factor in determining price action. When central banks hike or cut rates, the effects are felt across nearly every financial market, from stocks and bonds to currencies and commodities. Learn more in our guide to interest rates.
US banks earnings preview: 3 key themes to watch
Q4 earnings season kicks off in earnest later this week, with major banks like JPMorgan Chase, Citigroup, Goldman Sachs, and Morgan Stanley all scheduled to report their results by the middle of next week...
Forecasting 2022 inflation: Transitory no more?
The ongoing global inflationary pressure stems from two primary causes: Economic stimulus and supply chain disruptions - how will they evolve in 2022?
Inflation and Banxico: USD/MXN
Inflation data on Tuesday may determine whether the Bank of Mexico hikes rates by 25bps or 50bps on Thursday.
USD/TRY at all-time highs
If Turkey continues to threaten retaliation against the Kurdish YPG militants or if there is a continued threat that the CBRT will cut rates once again, USD/TRY may continue to put in all-time new highs
Inflation stocks: what to trade when inflation is rising
While general prices increase during inflationary environments, causing consumers to tighten their belts, there are a variety of asset classes that start to perform well in inflationary environments. Discover the opportunities inflation creates.