Central Banks

To trade the forex market and Trade With The Market, you need to understand the role of the Central Banks. The Central Banks manage the Monetary Policy normally set by their respective governments. They manage this policy without political interference. In general Central Banks of all countries are looking for stability in inflation and the lowest unemployment they can achieve. This is controlled normally by changing interest rates to accelerate the economy by reducing interest rates and to put the brake on an overheating economy. It is these interest rates that create the trends in the currency market. As such the phrase ‘The Trend Is Your Friend’.