If interest rates increase, the value of a fixed income contract decreases and vice versa10/28/2023 ![]() ![]() ![]() However when I read in investopedia, it says following: However I want to understand the reason.Īt first, I thought following: As interest rate increase, people borrow less, spend less, so cost of goods decreases, value of currency increases. ![]() The fact is as interest rates increases, the currency value also increases and vice versa. I was reading about changes in interest rates and its effect on currency value.
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