Thursday, June 11, 2015

Expected Interest Rates and Exchange Rates

In Global Economics and Business we take a look at a variety of variables that impact the value of a nations (regions) currency.  One of those variables is expected interest rates.  As expectations about interest rates change, so will the value of that nations currency.  Here is an example of exactly that.  In 2014, The Wall Street Journal reports that the expectation was that the Bank of England (central bank) would raise interest rates and that lead to an increase in the value of the British pound.

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