Overnight, rumours have increased that the Euro zone debt crisis will be overcome through a three pronged attack from the ECB, Greece and the European Financial Stability Fund (EFSF). ECB statements on Monday that they were keeping their options open for a rate cut, has been met with speculation that this could be pushed through [...]

Interest rates, inflation and exchange rates are all highly correlated. By manipulating interest rates, central banks exert influence over both inflation and exchange rates, and changing interest rates impact inflation and currency values. Higher interest rates offer lenders in an economy a higher return relative to other countries. Therefore, higher interest rates attract foreign capital [...]