Forex and the Fed
Because central bankers control interest rates, we are greatly interested in their actions regarding raising, lowering, or keeping interest rates the same. Remember, they conduct their interest rate policies based on inflation and must constantly study economic data for signs of inflation. Luckily, we have access to this information, too.
With it, we can analyze the same data and ponder, “What would the head of the central bank do if he saw this data?” We can then develop our own long-term bias for that currency. The study of economic data is called fundamental analysis.
Chapter 5 will focus on fundamental analysis and central banking policy.