Analyzing the Relationship Between the Fed Interest Rates and Foreign Exchange Markets

Abstract

The research on analyzing the relationship between fed interest rates and foreign exchange markets aims to establish how fed interest rates and foreign exchange rates are related based on capital flow between different countries. The research is to answer the question of how changes in federal interest rates affect capital flow between other countries since it affects the foreign exchange market. The research reviews various scholarly journals as a source of literature on previous studies done within the research area. The methodology to be applied is the empirical research approach. Data is to be collected from verified journals and research papers. Linear aggression is the data analysis method for the research, and XSLAT software will be used in data analysis. Independent and dependent variables will be developed based on the research objectives to help the study. Secondary analysis using linear aggression has been preferred because of how reliable, time-saving and cost-effective. The expected results from the research show that changes in federal interest rates affect the flow of capital since foreign exchange is implicated. Factors such as currency value and economic level influence federal interest rates and foreign exchange.