Are Central Banks Major Players In The Forex Industry?

The short answer is yes; in fact central banks are what the whole Forex industry revolves around. More specifically their commentary and decisions they make will impact interest rates. Every time something happens, every time the news comes out, a professional trader will be looking at it and their first thought will be, how this will impact how that central bank adjusts their interest rates.

Their thought process will be; will any particular news event make the central bank more likely to decrease rates or increase rates? They’ll subsequently trade the currency in that direction, if for example it’s an increase they’ll buy it and if it’s a decrease they will sell it.

That is essentially the most important question you need to be asking when trading Forex and the central banks when they make these decisions will literally move the price hundreds sometimes even thousands of pips just with their words and almost certainly with their actions.

So to sum up central banks are major players in the Forex industry and perhaps the most pivotal aspect you need to be watching when trading the currency markets.

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Jarratt Davis is the world’s ranked #2 (2008-2013) Forex Trader by Barclays FX Hedge Index, following years of mastering his art as a self employed trader Jarratt has now entered the field of education and delivers the most robust Forex education package on the market. Jarratt’s mentorship is one of the only programs on the market that is conducted by a verified professional trader. Forex Alchemy readers can get the FREE mini course where Jarratt gives away some of his secrets to success by Clicking Here... [space height="20"] [social type="facebook"][/social] [social type="twitter"][/social] [social type="google-plus"][/social] [social type="youtube"][/social]
  1. Ali Reply

    Good Work!

  2. Hafeez Reply

    Nice article you have written dear. Yes, Central banks definitely have a major role and that is why we trade with global banks only instead of desk dealers or market marker brokers. I trade with OctaFX, which is a 8 times award winning brokerage company and it provides me true ECN brokerage service, therefore desk dealing or any kind of manipulation is totally out of question and i always trade with banks with getting the lowest spread and the fastest execution of all trading orders without even requotes.

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