Forex Trading Futures
Commodity Futures and Forex Interest Rates What's the difference?
I've been negotiating contracts for commodities from a year ago and have done good for me. However, I have been considering currency trading as well. I know that interest rates affect currency markets depeding in pairs traded. Also, I know that interest rates affect the time reception / payment of certain pairs, however, I'm not sure that this type units. Also, I found a blog post a great relationship with the bond futures market http://www.aarontrade.com/commodityfuturestrading/?p=25 If interest rates of the currency affected by this kind of 30 years or more? If bond futures introducing a long-term bear market, how does this affect interest rates currency? Thanks for any possible help Ryan
Definitely, the interest rates (among other things) affect levels foreign exchange. The thing is that you need to look at interest rates of countries. If you are trading in the U.S. Dollar vs Canadian dollar, is necessary to observe the U.S. rates and Canada. If one of the two countries (eg U.S.) raises the fees, some people move their money into countries that currency (USD) and the currency should strengthen. If you are trading currency futures you should look at interest rates in the two countries at the time of expiration is your future. That is, if you are negotiating a future that expires in three months, you should look at 3-month interest rates in both countries (I could look at the types interest on bonds maturing in three months, or cash deposit rates for 3 months). That is, I think you will find that the price of a forward foreign exchange USD-> CAD expires three months from now the current USD> CAD fx spot price (1.13) + (USD rate 3M – 3M CAD rate) * 3 / 12. It has come to something as 113.2.
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