On June 15, the U.S. Federal Reserve ni announced its largest interest rate increase since 1994. The move, which was made to combat rising inflation in the U.S., sent ripples through the foreign exchange market. Interest rates and inflation are two of the most significant influences on forex market shifts, and with interest rates and inflation on the rise, forex market participants are taking notice. At IM Academy, a leading online financial education platform, students are pursuing a deeper understanding of the forex market as it continues to shift amid this global economic trend.
How Do Interest Rates and Inflation Affect the Forex Market?
Generally, when a country raises interest rates, the value of its currency increases. A higher interest rate tends to increase demand for the currency in question as foreign market participants look to maximize the interest accrued on their assets and thus seek currencies with higher rates.
Because higher interest rates increase demand for the currency in question, they are used as a means of combating inflation, which occurs when the market becomes flooded with a currency, decreasing its value and causing a rise in the prices of goods and services.
However, according to the Reuters article “Dollar Dips as Fed Hikes Rates, Flags Slowing Economy,” the Fed’s most recent interest rate increase caused a slight drop in the value of the U.S. dollar measured against a “basket of currencies.” While the value of the dollar rose to 105.79 measured against this basket of currencies immediately following the Fed’s announcement, it eventually dropped 0.50% to 104.76.
In the article, market strategist Karl Schamotta speculated that the drop may be due to Fed Chairman Jerome Powell’s insistence that this level of interest rate increase will not be common in the future.
Studying the Forex Market at IM Academy
This recent activity underscores the fact that the forex market is nuanced and can be a challenge to predict. Market participants need to understand several interrelated contributors to market shifts.
Founded by businessman and educator Christopher Terry, IM Mastery Academy is designed to help students pursue this nuanced level of understanding in the workings of the forex and other markets, including cryptocurrency and e-commerce.
IM Academy students study markets through live online mentorship and asynchronous learning materials, including videos and readings. Students interested in the forex market can sign up for the FRX Academy, which focuses on forex education and strategies. Or students can choose IM Academy’s Elite program, which offers students access to FRX Academy in addition to the DCX Academy for digital currencies, TBX Academy for time-based exchanges, and ECX Academy for e-commerce.
Students at FRX Academy have live access to IM Academy educators who focus on forex topics. IM Academy students can discuss strategies and market trends with these educators through the Academy’s GoLive sessions, which are accessed using the IM Academy web portal or app.
In addition, the readings and lectures cover a wide variety of topics ranging from market basics to advanced strategies. Topics covered include the involvement of major market participants, candlestick and continuation market patterns, and price reversal zones.
Through the FRX Academy’s Vibrata strategy, IM Academy students can discover an all-in-one strategy that covers short-term, intraday, and long-term market engagement. The Pivot strategy focuses on identifying pivot levels in markets, and the Steady strategy focuses on the role of institutional market participants in shifting markets.
IM Academy also offers FRX Academy students additional apps that can be accessed via smartphone. The Academy’s Swipetrades app illustrates a variety of approaches to the market and includes recommended risk parameters, while the Goldcup app emphasizes the value of high-quality market engagement rather than frequency.
Building a Better Forex Market Understanding
Equipped with these educational opportunities, strategies, and apps, IM Academy students can study the forex market in detail. As interest rates and inflation continue to shift the market, IM Academy is helping its students build a better understanding of forex market trends and impacts.
Note: IM Academy is an educational forum for analyzing, learning, and discussing general and generic information related to markets and strategies. IM Academy does not provide personalized recommendations or views as to whether an investment approach is suited to the financial needs of a specific individual. Before deciding to participate in the forex or other markets, you should carefully consider your investment objectives, level of experience, and risk. Most importantly, do not invest money you cannot afford to lose. You should take independent financial advice from a professional in connection with, or independent of, research and verify any information you find on the IM Academy website.