As, in essence, we are trading FX currency pairs that display the relative strength of one currency against another, we must understand and compare the economic forces behind each currency within the pair. For instance, if a currency is strengthening due to a higher interest rate, we must look at the difference in interest rates, called interest rate differential between the two pairs, not just the interest rate of the one.

Part of our multimedia library, learn in this video what is and how to read fundamental analysis in Forex and how to use it on your trading strategy.

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If you would like to know more about how to read fundamental analysis in Forex and discover the top 10 market forces that drive the currency markets and influence prices, please read our article How to Read Fundamental Analysis in Forex.