No Result
View All Result
Markets
EUR/USD GBP/USD USD/JPY AUD/USD NZD/USD XAU/USD
Central Banks
FED ECB BoE BoC BoJ SNB RBA RBNZ
Brokers
Wire Transfer Visa/Mastercard Paypal Fasapay Skrill Bitcoin
FCA Cysec CFTC NFA FSA
Forex Guide
Beginners Basics Technicals Fundamentals
Education
Forex Articles Forex School Forex Terms
Trading Tools
Live Charts Economic Calendar Market Hours Fibonacci Calc Pivot Points
Forex Strategies
5 Minutes 15 Minutes 30 Minutes 1 Hours 4 Hours Daily
Resources
Indicators Forex Ebooks MT4 MT5
Mira FX
  • Markets
  • Education
  • Central Banks
  • Resources
    • Ebooks
    • Indicators
      • MT4 Indicators
      • MT5 Indicators
  • Brokers
    • Deposit Bonuses
    • No-Deposit
    • Demo Contest
    • Live Contest
    • Brokers News
  • Tools
  • Login
  • Deposit Bonuses
  • No-Deposit Bonuses
  • Demo Contest
  • Live Contest
  • Brokers News
  • Brokers
Mira FX
  • Markets
  • Education
  • Central Banks
  • Resources
    • Ebooks
    • Indicators
      • MT4 Indicators
      • MT5 Indicators
  • Brokers
    • Deposit Bonuses
    • No-Deposit
    • Demo Contest
    • Live Contest
    • Brokers News
  • Tools
Mira FX
  • Markets
  • Education
  • Central Banks
  • Resources
  • Brokers
  • Tools
  Latest
RBA Minute: Inflation was expected 2 to 3% range in 2023 June 21, 2022
Next
Prev

What Are The Central Bank Mandates ?

Mira Team by Mira Team
July 30, 2020
in Article
Reading Time: 2 mins read
ShareTweetShareSendShareSend

Why do we care about a country’s central bank, its mandates, and its gold and foreign currency reserve holdings? We care because, perhaps more than any other institution, a country’s central bank can determine whether that country’s currency is going to get stronger or weaker.

Thankfully, central banks don’t just jump into the market willy-nilly to try to push currency prices higher or lower. The moves they make in the market are typically driven by the mandates they have been given. Some central banks have been charged with keeping economic growth under control by not letting the economy expand too quickly or contract too dramatically. Other central banks have been charged with keeping unemployment levels low. Still other central banks have been charged with both mandates (which can prove to be quite tricky at times). Understanding the mandates that the central bank that watches over the currency you are looking to trade has been given can help you predict the actions that the bank circumstances.

Once you understand the mandates that the central bank has been charged with, you need to find out how much gold and foreign currency reserves the bank holds. The amount of reserves the central bank holds is a good indicator of how capable the bank is of intervening in the open market. Central banks with smaller reserves have less ammunition with which to combat volatile currency markets and wild price swings. Conversely, central banks with larger reserves have plenty of latitude to make adjustments in the Forex market if they deem it necessary.

As you keep a watchful eye on these central banks, be on the lookout for any news that might indicate that the banks are making changes to the composition of their foreign exchange reserves. We have seen a trend of central banks trying to diversify away from the U.S. dollar ever so slightly, and if that trend continues into the future, it could affect aggregate demand for the U.S. dollar.

According to the International Monetary Fund (IMF) and its latest Currency Composition of Official Foreign Exchange Reserves (COFER), www.imf.org the U.S. dollar is still the reserve currency of choice by quite a wide margin, but the euro is gaining some ground.

Tags: Fundamentals
ⓘ Some contents provide links to third-party news and current events as a convenience to you. We have not reviewed and don't endorse the contents of these sites. Please always do your own research. Mira FX does not endorse any companies, products or services which are represented on this article. Mira FX is not liable for any damage or loss, including but not limited to, any loss of investment, which may be based either directly orindirectly on the use of or reliance on such information. Before deciding whether or not to take part in foreign exchange or financial markets or any other type of financial instrument, please carefully consider your investment objectives, level of experience and risk appetite.

Related Posts

How to Enter a Trade With Confidence?

How to Enter a Trade With Confidence?

FBS - September 14 | Basic
forex articles

Tips Make Forex Trading Strategies

SUSILO SM - Jan 26 | Basic
How To Trade Pivot Points

How To Trade Pivot Points

MIRA TEAM - JAN 30 | TECHNICAL
Dark Cloud Cover Pattern

What is a Dark Cloud Cover Pattern?

MIRA TEAM - Feb 20 | TECHNICAL
Swiss Franc Currency – The Swissy in Forex

Swiss Franc Currency – The Swissy in Forex

Mira Team - August 7 | Fundamentals
Forex Simple Fractals Strategy

Forex Simple Fractals Strategy

Dwikun FX | Candlestick - H1

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Advertisement

Latest

RBA Minute: Inflation was expected 2 to 3% range in 2023

RBA Minute: Inflation was expected 2 to 3% range in 2023

JUN 21, 2022 | RBA, AUD

BoE: Another Dovish Hike as Expected

JUN 20, 2022 | BoE, EUR/GBP

Chair FED Jerome H. Powell Welcoming Remarks

JUN 17, 2022 | USD, FED

USD/CAD looks for more upside; 1.2875 in focus

Jun 17, 2022 | USD/CAD

Italian Trade Balance – April 2022

JUN 17, 2022 | EUR

A Simple to Understand Method to Catch ALL the Biggest Trends and Profits!

DAVID G - Jun 17 | Money Management
Advertisement
  • About
  • Advertising
  • Disclaimer
  • Contact
  • Privacy Policy
  • Terms & Conditions
Risk Warning: All information on this website, including any opinions, articles, charts, prices, news, data, Buy/Sell signals, reviews, research and analysis is provided as general market commentary and does not constitute any investment advice. Mira FX is not liable for any damage or loss, including but not limited to, any loss of investment, which may be based either directly orindirectly on the use of or reliance on such information. Before deciding whether or not to take part in foreign exchange or financial markets or any other type of financial instrument, please carefully consider your investment objectives, level of experience and risk appetite. Do not invest more money than you can afford to lose. Note that the high level of leverage in forex trading may work against you as well as for you. Please seek advice of an independent financial advisor if you are not fully aware about the risks associated with foreign exchange trading. Forex trading on margin involves considerable exposure to high risk, and may not be suitable for all investors. Mira FX does not endorse any companies, products or services which are represented on Mira-FX.com The information on this website is subject to change without notice.
No Result
View All Result
  • About
  • Advertising
  • Central Banks
  • Contact
  • Disclaimer
  • Forex Brokers
    • Forex Regulatory Bodies
  • Index
    • Daily Forex Strategy
    • Forex Ebooks | Language: English
    • H1 Forex Strategy
    • H4 Forex Strategy
    • M15 Forex Strategy
    • M30 Forex Strategy
    • M5 Forex Strategy
  • Markets
    • EUR/JPY
  • Mira FX
  • Privacy Policy
  • Terms & Conditions
  • Tools
    • Central Bank Calendar (2022)
    • Economic Calendar
    • Fibonacci Retracement Calculator
    • Live Charts
    • Market Hours
    • Pivot Point Calculator

© 2022 Mira FX | Copying of materials is allowed only with the presence of an active link to a source page.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In