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Kathleen Brooks on Forex: A simple approach to trading foreign exchange using fundamental and technical analysis by Kathleen Brooks

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Interest rates and central banks

Central banks control interest rates and interest rates are important for a currency. That is what you should take away from this section of the book. In the following section I will explain what central banks do, show using real-life examples why they are so pivotal to FX and thus why I watch them to inform my trading.

The major central banks

Most countries in the world have a central bank. They tend to meet monthly, or at least seven or eight times a year, to decide policy. The most important central banks in the G10 are:

  • US Federal Reserve (Fed)
  • European Central Bank (ECB)
  • Bank of Japan (BOJ)
  • Bank of England (BOE)
  • Reserve Bank of Australia (RBA)

The People’s Bank of China (PBOC) is also ...

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