Raffaele
Wed Aug 07 2024
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6 answers
1573
How does the Fed Funds rate affect exchange rates?
Could you please elaborate on how the Federal Funds Rate influences exchange rates? I'm curious to understand the intricate relationship between the central bank's benchmark interest rate and the valuation of currencies against each other. Does a rise or fall in the Fed Funds rate directly impact the strength or weakness of the US dollar in comparison to other currencies? And if so, what are the underlying mechanisms at play? I'm eager to gain a deeper insight into this complex financial dynamic.
