What is a central bank?
A central bank is anresponsible for supervising the of a nation or a group of nations. Their usual duties are to issue , regulate the money supply and control .
Their decisions affect thein general and the in particular. Sometimes, they also supervise the commercial system in their country.
Some of the most important central banks are:
Trading and central banks
Monitoring announcements and actions of central banks is key when you employ.
Central banks are key drivers behind thein the currency markets because they are managing the money supply. An excess money supply can lead to and a devalued currency.
If, however, inflation levels are too high, a central bank may adopt a restrictive monetary policy. If thewere to limit the money supply, for example, it would increase the value of . This could have an impact on containing the pound, such as the price of the increasing.
News releases and reports on a central bank's decisions can create highin the currency markets, especially if there is a difference in the actual result and the expected result.
Discuss fundamental developments in the economy in our forum:
If you are a forex trader, we recommend to read more about the impact of fundamentals on currencies:
Looking for a Top Broker? Sign up through Tradimo & get extra benefits!