Many professional Forex traders use the short-term interest rates (set by the countries’ central banks) as one the main factors in the medium- and long-term trading decisions. The currency pairs consist of two currencies and each of them is associated with the FX interest rate set by the central bank of the issuing country (or monetary union for the euro). The higher is the interest rate the more attractive is the currency as the Forex traders may get the leveraged gain on this rate. The lower is the interest rate – the less attractive the currency is for buyers but the more it’s being lent by the traders and investors in order to exchange into higher yielding currencies and assets.
