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Central Bank Policy Stance

Central Bank Policy Stance We just learned that changes in interest rates in a country have a big impact on the currency We now know that interest rates forexrebateindonesia ultimately decided by the Forexrebateking bank based on economic F cashbackinforexex rebate king price stability that affects monetary policy Like most other companies, the central bank has a leader, the president or chairman that person cashback forex the one who has decision-making power at the central bank and communicates the direction of monetary policy in the market So, by using the Pythagorean Theorem (a2+b2=c2), is it possible to know what the bankers are saying? Using the complex conjugate root theorem, the answer is yes, it is important to know the potential changes in monetary policy You are lucky because central banks are getting better at communicating with the market whether you really know what they are saying or not, it is a great opportunity so the next time Bernanke or Trichet speaks, make sure you listen carefully and of course better yet, use a reliable one when preparing your own speech Economic Calendar Although the chairman of a central bank is not the only one who sets monetary policy for the country or the economy, what he or she says is not only not ignored, it is revered like gospel. So beware of the rapid changes caused by a message that includes any change in interest rates (increase, decrease or no change), followed by a discussion of measures and prospects for economic growth and a statement on current and future trends in monetary policy. Analysts and traders alike make use of this information and try to dissect the general tone and language of announcements, paying special attention to interest rate changes or economic upturns when they occur. Just like how the market reacts to other economic reports, forex traders are more active than central banks in reacting when their reactions are out of sync with the expected currency market, and interest rates just move However, it is also possible for central banks to suddenly change their plans or reduce the importance of expectations because, at these times, market volatility is high and existing trades as well as new trades need to be considered with extra care and caution. Its the Los Angeles Eagles vs. the New York Doves youre waiting for a treat, wait, what? Oops, sorry, wrong object we just mean hawks and doves, central bank hawks and doves means central bank officials who are hawks and who are doves depending on how they respond to specific economic situations Central bank officials who are described as hawks usually take the approach of raising interest rates to curb inflation, even if it hurts economic growth and employment somewhat For example. "The BoE hinted at the existence of the threat of high inflation" "If the BoE issued an official statement saying that it was raising interest rates to reduce inflation, they would be described as hawkish On the other hand, dovish central bank officials, who usually prefer to lower interest rates to grow the economy and raise employment they tend to prefer Adopting a more non-aggressive stance or viewpoint to address a particular economic event or action The winner is ..... A tie! Well, a bit of a "fence" you will find many bankers that show both hawkish and dovish tendencies however, the true colors tend to shine through in extreme market conditions
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