Central Bank Rates

Interest rates are an intrinsic power of Forex markets. This is just that "Force" from Star Wars movies that connects everything in the Universe. So as interest rates move, they cause forex rates to move.

Why you should know Central Bank Rates?

Without any hesitation, we can point out that central bank rates are the most important and powerful factors in the forex market. Interest rates are appointed by Central Banks when they make regular monetary policy announcements and interest rate decisions are always the most-watched part of such announcements.

This impacts how attractive a specific currency is at the moment which explains why they are so closely followed.

An example would be an interest rate of 4.25% for the Russian ruble (RUB) and an interest rate of 0.25% for the United States dollar (USD). This should theoretically mean that the Ruble should be bought against the Dollar as it will increase in price due to the difference in interest rate yields. Additionally, increased demand should also push the exchange rate in your favor.

This is how the basic Interest Rate Arbitrage works, however, the market is much more complicated than simple interest rate differences, therefore, further analysis is needed.

Check out our article on How Interest Rates Decisions Affect the Financial Markets to learn more.

How to use the Central Bank Rates table?

The table itself is as simple as it gets and includes:

  • Country
  • Country code
  • Name of respective Central Bank
  • Current Interest Rate
  • Delta of % change from the previous Rate
  • Date of last change

Therefore, using the table is simple, look up the specific currency interest rate and check the “current” section in order to see the interest rate in addition to the increase/decrease from the previous set rate in the following section of “Delta” and the date it was set in “Changed” section.

Since interest rates dictate the attractiveness of a specific currency you can quickly get an idea of which ones are supposed to appreciate

Additionally, further reading is always available in our blog/trading resources section or looked-up using the search feature.

Keep in mind that this information should also be used in addition to other tools and types of analysis such as:

  • Fundamental
  • Sentiment
  • Technical

Read further about How to Combine Different Types of Forex Analysis

Now you should be ready to start using the Central Bank Rates table and combine it with Forex Day Trading Strategies.