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How do unexpected changes in interest rates by central banks impact the forex market?

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Unexpected changes in interest rates by central banks significantly impact the forex market by influencing currency values through capital flows and altering market expectations, leading to volatility as traders quickly adjust to the new interest rate environment.

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Unexpected changes in interest rates by central banks can lead to abrupt shifts in currency values, with rate hikes strengthening the currency and cuts weakening it, resulting in increased volatility and rapid price movements in the Forex market.

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