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EUROPEAN CENTRAL BANK
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The task of the European Central Bank is to maintain the value for Europe’s chief currency, the Euro, one of the 6 major currencies dealt with in forex trading.
Controlling the value of the Euro currency is critical to making it a viable investment for a forex broker or trader as stability is key to investors profiting—you don’t have to worry about the value dropping overnight.
Basic European Central Bank Info
Located in Frankfurt, Germany, the European Central Bank (ECB) is one of the world’s largest banks. The Euro is used by 17 countries in the Eurozone and is the second most traded currency behind the US dollar, making it very important to FX trading.
The ECB is run by a board of directors, a president, and members of central banks within the European System of Central Banks (ESCB). These individuals are charged with the task of maintaining low and consistent levels of inflation. High inflation could devalue the Euro and send the economy into disarray, which hurts forex investors with much currency tied up in the euro.
Forex Trading Significance
The European Central Bank has also been put in charge of overseeing foreign exchange operations, so they have a direct correlation to forex trading. Because of the ECB and its work, the euro is generally a safe investment and stays stable, even through an economic crisis.
Related Forex Trading Indicators
A forex broker or trader who pays attention to actions of the European Central Bank will also likely pay attention to the central banks of other countries that have major currency, including the Bank of Japan, the Reserve Bank of New Zealand or the United States Fed.
Browse our additional resource pages for more basic info on FX trading indicators.