International interest rates and foreign exchange markets play a pivotal role in global political and economic events. The numerous factors that influence them, market dynamics, and the complex ways in which they in turn affect the economy make foreign exchange and interest rates a fascinating, although not always easily understood topic.

Contrary to what intuition may suggest, interest rates and foreign exchange are not only vitally important to governments, central banks and multinational companies, but their very nature affects everyone, right down to private households. Among other factors, they are central to determining the cost of buying equity or the value of a currency relative to others, both of which have a direct bearing on the development of national economies.

Fluctuations in said rates can impose a large amount of risk to which both companies and investors may be exposed. To manage these risks more effectively and flexibly, we have over time witnessed the emergence of a wide spectrum of instruments.

This manual intends to provide a detailed account of the macroeconomic drivers powering the interest rate and foreign exchange markets, while illustrating the practicalities of the markets in the past and in the world today.