[Answer] By what mechanism do interest rates affect currency values?

Answer: U.S. Stocks rally on Fed's Surprise reduction of Interest Rate.

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By what mechanism do interest rates affect currency values? Global investors are attracted by higher bond yields in high interest rate countries. By what mechanism do interest rates affect currency values? U.S. Stocks rally on Fed's Surprise reduction of Interest Rate. Generally higher interest rates increase the value of a country's currency . Higher interest rates tend to attract foreign investment increasing the demand for and value of the home country's currency . Thu Aug 16 2018 · Today the dollar is going up as the Fed raises interest rates even though interest on the 10-year treasury is still under 3 % - this rate is market-driven and NOT Fed driven I should point out. But compared to the rate of return in the rest of the world 2.85% or so looks pretty damned good. By what mechanism do interest rates affect currency values -13650049 Sovereign rates which are the official interest rates issued by the government of a country are used to create the fx forward market . The forward rate of a … In economic theory if the interest rates in one country increase then the currency value of that country will increase as a reaction. If the interest rates ...

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