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Post of the Day: Interest Rate

Student’s Question:

How do we find out interest rate on particular currency and who decides it? If I buy EUR/USD than I am earning interest on EUR and paying on USD right!!

Power Course Instructor’s Answer:

The interest rates on the major currencies can be found on the homepage of www.dailyfx.com and it will look like the post below.

The rates are set by the Central Banks (the Fed in the US) of the country issuing the currency.

On any of the pairs, if a trader goes long the currency in the pair with the higher interest rate, they will earn the difference between the two interest rates.

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