Glossary › interest rate differential
Trading glossary · fundamentals
interest rate differential
The difference between the cost of borrowing in two countries, which helps move the price between their money.
The fuller meaning
The gap between two countries' interest rates. Money tends to flow toward higher rates, so a widening gap in one country's favour tends to support its currency; with growth and risk mood it is a main fundamental driver of forex.
interest rate differential, also called rate gap, interest rate gap.
Related words
adoption · analyst estimate · balance sheet · Bank of Japan · beat · bond · book value · business cycle · cash flow · central bank