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fundamental divergence. You've got to understand the

detailed but yeah guys that's it for this lesson. I hope you

banks do. Now this is going to be explored in a lot more

for everything that's to come. So yeah guys take care and I'll

you compare one economy to the next. If you start to see that

that you affect interest rates and that's exactly what central

obviously take notes and this one is more in a preparation

interest rates. So again just go on trade and economics com.

comparison. So this was a screenshot I believe from a

lot of countries that have low interest rates for example the

everything shutting down eventually you need the economy

understand okay which is which is stronger at the moment even

while ago but you'll see around the world especially there's a

USD for going for example. Now in the same way that we saw the

expect to get stronger or weaker. There there in fact

individually or you can look at it as part of the data

are trying to expand because of the effects of the pandemic and

US at the moment has 0. 25% the United Kingdom 0. 1% France 0%

economy. So inside the domestic currency in a way. Because at

You're going to get all the information there. You can look

difference between the two economies and which one we can

at the different countries and their economic indicators

GBP is devaluing. You might be confused because you've got to

that will lead to you understanding where you see GBP

though they're both devaluing and that's exactly what we call

to expand and what's the way what's one of the ways you do

Italy 0% as you can see we're in a time where the economies

lesson on GDP you're going to get the exact same table on

might have not come across but what it means is inside the

investment that's everything that we're going to be getting

into. So just understand that interest as interest rates

DXY for example or the US dollar is devaluing but also

looking for is a fundamental divergence. What that means is

devalue endogenerously. Um this is a word that perhaps you

reduced usually you start to see the currency devalue

the end of when it comes to fundamentals what we're really

know you have less to pay less to pay back because the higher

into it into anything and just as a precursor to everything

interest rates now throughout this you're going to understand

due to that economic stimulation. Now the effect of

interest rates and the direct effect it has. So as interest

loan that you'd like or a mortgage for example you're

borrowers borrow and lend money particularly it's more about

money supply for example because essentially they're

more encouraged to go out and get that mortgage because you

interest rate means the highest the higher amount you're

that you will learn. Uh understand this concept of

interest rates has on inflation exports and imports global

the end of the day understanding fundamentals is

going to have to pay back on that loan therefore the expands

the borrowing part so if you've got a lower interest rate on a

the direct effects of interest rates on the economy and what

our currency pairs and where we see it going. Now before we get

rates lower we are seeing an expansionary policy because it

all well and good but how do we actually translate that into

encourages more economic stimulation as consumers and

it means for the currency pairs that we will trade because at

course this is just an introduction to everything and

and bonds is what governments actually use to increase their

not just going to be the yields on the bond market but the bond

like loans for them but yeah that's it for the effect on

market is very heavily influenced by interest rates

looking at the yields on assets like bonds it's of course it's

then of course like we mentioned previously it affects

investment around the world particularly when you're

we're going to be breaking down in much more depth but of

contractionary monetary policies it's something that

third section of fundamentals or the second one. But yeah

through the introduction of expansionary versus

monetary policies so it has an adverse effect on the inflation

loans for businesses so of course that affects stimulation

interest rates. The first way we can look at it is that it

going to get our mortgages this is where we're going to get our

Fed fund rate. Now there's going to be a whole lesson on

affects the loan rates between banks. This is what we call the

this has a great effect on the consumers and the general

around the economy as well then another way to look at it is

population because at the end of the day this is where we're

deflationary or contractionary phases which is deflationary.

this and there are types of indicators in I believe the

So in the US it's the Federal Reserve. Now the effect of

looking at your domestic currency and what they offer

essentially they're the guys that fluctuate the the interest

rates to to either enter expansionary phases or

they're the driving they're the drivers of the economy

return on your investment you're going to be not only

controls the interest rates put simply it's essential banks

with their assets but also internationally as well and who

large amount of money to invest and you're looking for the best

between them all and also investment between the

different types of economies you know if if you've got a

compared to another. There's a lot of trade that happens

So as we know especially in modern times the economy is

global. It's not just one entity compared to one entity

the internal economy but also affecting the global economy.

most important factors in the economy as it heavily

lender charges a borrower and is a percentage of the

it usually would So the interest rate is the amount a

principle, the amount loaned. Now what's the importance of

drivers of the economy it's up to them whether they put breaks

on the economy to slow it down or to allow it to speed up as

influences the movement of money and investments around

the interest rate? The interest rates are perhaps one of the

back to our introduction and the economic train video you

know it's up to the central banks whether so who are the

Yes hello everyone welcome to the next lesson so in this one

we're going to be looking at interest rates so if you refer

can refer to interest rates as the breaks of the economy you

see you in the next video.