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Fundamental articles

In this section we explain how economic fundamentals indicators, such as interest rates, influence FX rates.

Death of Osama Bin Laden causes rise in S&P futures but not the $USD // 02 May 2011

Early indications are that the death of Osama Bin Laden will cause a significant rise in the S&P 500 but not necessary a rally in the USD vs. cross currencies. Read more >>

What does a flat yield curve mean for interest rates? // 02 May 2011

A flat yield curve occurs when there is little difference between the interest rates on government bonds for different maturities. For example, the rate on the one month bond might be similar to that of the 3 month or 1 year bond as illustrated in the chart below. Read more >>

Using yield curves as a guide to FX rates // 13 April 2011

In a previous article we looked at how interest rates affect fx rates. If you are not familiar with this concept, you should first review that article before reading on. This article looks at how the yield curve can be used to predict future interest rate trends. Read more >>

The fall in the USD explained // 12 April 2011

In recent times, the USD has been sold off against all major cross currencies. This article looks at why the USD has performed so badly and looks at the future of the Greenback. Read more >>

Australian Floods in Queensland set to keep the AUD low // 12 April 2011

The devastating floods that have rampaged south east Queensland, including the CBD area of Brisbane, are set to keep the Australian dollar low vs. cross currencies for at least the next 6 months as Queensland recovers from the significant loss of business infrastructure. Read more >>

What is a foreign exchange rate? // 12 April 2011

The foreign exchange market works a little differently to the stock or commodity markets. Specifically, you cannot look at one currency in isolation to form an exchange rate. You must look at a currency in conjunction with another currency in order to form an exchange rate. Exchange rates are always expressed as a combination of two currencies. Read more >>

How do changes in interest rates affect foreign exchange rates? // 12 April 2011

To answer the question on how interest rates affect foreign exchange rates, you should first refresh yourself on what a foreign exchange rate is. It’s always a combination of two currencies (e.g. USD/AUD or EURO/USD). Read more >>

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