When using Fiddler to monitor HTTP Requests & Responses in Internet Explorer it ignores all traffic directed to http://localhost.
The correct answer is that it's not that Fiddler ignores traffic targeted at Localhost, but rather that most applications are hardcoded to bypass proxies (of which Fiddler is one) for requests targeted to localhost.
Hence, the various workarounds available: http://fiddler2.com/documentation/Configure-Fiddler/Tasks/MonitorLocalTraffic
You can use http://ipv4.fiddler or http://ipv6.fiddler instead of localhost