FOREX Newsletter - October 11, 2024

Exchange Rates Update

Weekly Exchange Rates from the Federal Reserve

The Federal Reserve's latest H.10 Weekly report, updated on October 7, 2024, provides the current foreign exchange rates. Here are some key rates:

• Australian Dollar: 0.6934 (Sep 30) to 0.6797 (Oct 4) per USD.
• Brazilian Real: 5.4509 (Sep 30) to 5.4585 (Oct 4) per USD.
• Euro: 1.1145 (Sep 30) to 1.0961 (Oct 4) per USD.
• Japanese Yen: 143.2500 (Sep 30) to 148.6900 (Oct 4) per USD.
• British Pound: 1.3399 (Sep 30) to 1.3107 (Oct 4) per USD.

Live and Historical Exchange Rates

OFX provides live and historical currency exchange rates, highlighting the dynamic nature of forex markets. As of October 9, 2024, key rates include:

• 1 USD = 0.911768 EUR and the inverse rate of 1.096770.
• The interbank rate, or market rate, is the official live conversion rate at which banks trade currencies with each other. This rate can vary significantly from consumer rates charged by banks, which often include a margin of up to 5%.

Interest Rates and Their Impact on FOREX

Central Bank Interest Rates

The EarnForex interest rates table details current and historical interest rates for 29 sovereign countries and one monetary union. These rates are crucial for forex traders as they influence the relative strength of currencies and are used in carry trades based on interest rate differentials. For example, changes in central bank rates can affect the overnight swap paid or received by traders holding currency pairs.

Swiss National Bank (SNB) Interest Rates

The SNB has set its policy rate at 1.00% effective from September 27, 2024. Other key rates include:

• Interest rate on sight deposits up to threshold: 1.00%
• Interest rate on sight deposits above threshold: 0.50%
• SARON (Swiss Average Rate Overnight): 0.93% as of October 8, 2024.

Exchange Rate Systems

Types of Exchange Rates

Exchange rates can be categorized into three main systems:

• Floating Exchange Rates: Determined by market forces such as supply and demand, interest rates, and economic data. Examples include the USD, GBP, and EUR.
• Managed Float Exchange Rates: Central banks intervene to keep the currency value within a predetermined band. Countries like Indonesia and Singapore use this system.
• Fixed Exchange Rates: The currency value is tied to another currency, such as the Hong Kong dollar pegged to the USD.

Market Insights and Trading

Best Time to Trade FOREX

The best times to trade forex are often during the overlap of major market sessions, such as the London and New York sessions, due to increased liquidity and volatility.

Technical Outlook

Technical analysis for major currency pairs like GBP/USD and EUR/USD continues to be a focal point for traders. Recent technical outlooks suggest that these pairs are influenced by various economic indicators and central bank decisions.

References: Foreign Exchange Rates -- H.10 Weekly - Federal Reserve Board: Search interest rates and exchange rates | Sveriges Riksbank: Interest Rates Table - EarnForex: Currency Exchange Rates | Foreign Exchange Rates Today - OFX: Current interest rates and exchange rates - SNB: The best time to trade forex | Dukascopy Bank SA

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