What is the ECB?
ECB (European Central Bank)
Forex Trading Glossary
Quick Answer: The European Central Bank sets monetary policy for the Eurozone, shaping the euro through rate decisions and guidance.
What is the ECB?
The European Central Bank (ECB) manages monetary policy for the Eurozone. Its decisions influence the euro and global risk sentiment.
Mandate and Tools
- Price stability: Target inflation near 2 percent.
- Main refinancing rate: Primary policy lever.
- Asset purchase programmes: Quantitative easing and reinvestments.
- Forward guidance: Communication about future policy paths.
Event Risk
ECB meetings and press conferences frequently create large moves in EUR pairs.
How Traders Track the ECB
- Monitor data: Watch Eurozone CPI, GDP, and PMI releases.
- Follow speeches: Remarks from ECB officials often shift expectations.
- Watch spreads: German Bund versus U.S. Treasury yields affect EUR/USD.
- Assess risk sentiment: ECB actions influence global equity and bond flows.
Related Terms
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