WHAT HAPPEN's TO EURUSD AND XAUUSD WHEN FED INCREASE OR DECREASE INTEREST RATES ?

The impact of changes in interest rates on currency pairs such as EUR/USD and commodities such as XAU/USD can be complex and can depend on a variety of factors, such as market sentiment, economic indicators, and other central bank policies.

However, in general, when the Federal Reserve (Fed) increases interest rates, it can lead to an increase in demand for the U.S. dollar, which can result in a decrease in the EUR/USD currency pair and the XAU/USD commodity pair.

This is because higher interest rates can make the U.S. dollar more attractive to investors seeking higher returns on their investments. As a result, they may purchase U.S. dollars and sell other currencies, which can cause the value of the U.S. dollar to appreciate relative to other currencies, such as the euro.

Similarly, higher interest rates can also increase the opportunity cost of holding non-yielding assets such as gold, which can reduce the demand for gold and lead to a decrease in the XAU/USD commodity pair.

Conversely, when the Federal Reserve decreases interest rates, it can lead to a decrease in demand for the U.S. dollar, which can result in an increase in the EUR/USD currency pair and the XAU/USD commodity pair.

Overall, the relationship between changes in interest rates and currency/commodity pairs can be complex, and traders should carefully consider a range of factors when analyzing market movements and making trading decisions.