Just a question how do I know interest rate changes for a certain currency. And how does interest rates affect pips, ? thanks
To track changes in a currency’s interest rate you need to follow the short-term interest rates of the country in question. That means two things. First, keep track of the central bank’s (like the US Federal Reserve) policy. Second, and at least as importantly, follow the short-term interest rate or money market rates. That’s things like Eurodollars (those are US dollars on deposit outside the US, not EUR/USD) and other Eurocurrencies as well as sovereign instruments like T-Bills, etc.
I wrote an article a while back that provides a basic outline to the fixed income (interest rate) market which you might want to read.
Interest rates do not directly effect pips, if by that you are asking about pip values. If not, you’ll need to clarify that question a little.
Nice article, John. I have the Fabozzi books in my library, too.
Maybe xxfunguyxx was looking for info on “central bank” rate change announcements. This may help:
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