The interest rate is an index to measure the profitability of the savings or of some investment. This word shows an amount of money and which will be the percentage that we will obtain, or in case that you have taken a credit, when will we have to pay it.
The forex interests are related to the pair of foreign currencies that you choose for investing. What do we want to say with this?. In all the continents the interest rates vary. In forex the foreign currencies are commercialised in pairs from different continents and so the forex interests vary significantly.
Each foreign currency has what is called stoppage cost at the forex world, this cost varies according to the difference of the interest rates between the 2 foreign currencies.
For example, in the pair EUR/dollar the difference of the rates is the difference between the short European rates and the short American rates.
Actually the forex interests that can be taken from this pair are not very much, as the European rate is in 4% and the American one in 4,25% , but as an example it will be useful to understand. That means that the profitability will be of 0,25% annual, according to the values of the reference rates.
The forex interests are the profit margin that gets the investor, any news about interest rates can affect directly the foreign currencies market. If a country raises the interest rate, the currency of this country will become stronger in front of other currencies of the world and investors will invest on the currency of this country to obtain more profits.
Variations in forex interests are for you to take advantage of and that’s why you should pay attention to variations that there are in the different continents to know where to invest.