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Washington, D.C. · Central bank · USD

Federal Reserve System (FED)

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USDUS Dollar Index

Sets US interest rates. Every Fed decision moves the dollar — the currency on one side of almost nine in ten FX trades.

How the FED moves the USD

A central bank sets the interest rate on its currency. Traders compare that rate with the rates of other central banks; the wider the gap, the stronger the pull of money towards the higher-yielding currency. That is why the minutes before a FED decision are among the most volatile of the month for the USD. Book I and Book II of the ForeXistenZ trilogy show how to prepare for these days — and when to stay out.

SeatWashington, D.C., United States
CurrencyUSD
Watched throughUS Dollar Index
Official sitewww.federalreserve.gov

Frequently asked

What does the Federal Reserve System do?

Sets US interest rates. Every Fed decision moves the dollar — the currency on one side of almost nine in ten FX trades.

Where is the Federal Reserve System?

The Federal Reserve System (FED) is in Washington, D.C., United States.

Why do forex traders watch the FED?

Interest rates are the price of a currency. When the FED raises or cuts rates — or only hints at it — money moves into or out of the USD, and US Dollar Index reacts within seconds.

Where are the FED’s decisions published?

Official decisions, statements and the meeting calendar are published on https://www.federalreserve.gov.

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Other central banks

BOC

Bank of Canada

Ottawa, Canada — Steers the Canadian dollar — the loonie, closely linked to the price of oil.

BANXICO

Banco de México

Mexico City, Mexico — Sets rates for the peso, the most traded currency of Latin America.

BCB

Banco Central do Brasil

Brasília, Brazil — Guards the real and runs Pix, one of the world’s fastest-growing instant payment systems.

BOE

Bank of England

London, United Kingdom — The Old Lady of Threadneedle Street — sets UK rates and guards one of the largest gold vaults on Earth.

BOG

Bank of Ghana

Accra, Ghana — Ghana’s central bank — buying domestic gold to strengthen the cedi.

SNB

Swiss National Bank

Zurich / Bern, Switzerland — Guardian of the Swiss franc, the safe haven the market runs to when fear rises.