Forex News
- Dow Jones futures slip after Wednesday’s gains as investors rotate out of technology sectors
- Alphabet falls 0.41% after flagging higher AI spending, while Nvidia rises 1.9% and Broadcom jumped 6.5% in extended trading.
- US stocks came under pressure amid hawkish Fed signals and shifting geopolitical sentiment.
Dow Jones futures slip 0.05% to around 49,560 during Thursday’s European session ahead of the US regular opening as investors rotated out of technology and into more reasonably valued sectors. The Dow Jones index gained 0.67% on Wednesday's regular hours.
However, S&P 500 and Nasdaq 100 futures rise 0.14% and 0.37%, respectively, to near 6,910 and 25,090, as dip buyers emerged following two days of heavy selling in tech shares and investors assessed fresh earnings. In Wednesday’s cash session, the S&P 500 and Nasdaq Composite declined 0.51% and 1.51%, weighed down by software stocks amid concerns that AI could disrupt existing business models.
During extended hours, Alphabet fell 0.41% after signaling a sharp rise in AI spending this year, while the outlook lifted AI-related stocks such as Nvidia, up 1.9%, and Broadcom, which jumped 6.5%.
US stocks came under pressure amid hawkish Federal Reserve (Fed) signals and shifting geopolitical sentiment. Fed Governor Lisa Cook said she would not support further rate cuts without clearer evidence that inflation is easing, highlighting concerns over stalled disinflation rather than labor market weakness. Investors also assessed the implications of Kevin Warsh’s nomination as Fed chair, noting his preference for a smaller balance sheet and a less aggressive approach to easing.
Market sentiment briefly turned cautious after media reports suggested US–Iran talks could collapse, but officials from both sides later confirmed discussions would proceed as scheduled, despite an unresolved agenda.
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
- Gold meets with a fresh supply on Thursday amid a firmer USD, though it lacks follow-through.
- Dovish Fed bets support the commodity and limit further losses amid geopolitical uncertainties.
- Traders now look to a duo of US labor market reports for a short-term impetus later this Thursday.
Gold (XAU/USD) struggles to capitalize on a solid intraday bounce from sub-$4,800 levels. It remains depressed through the first half of the European session on Thursday amid mixed fundamental cues. The US Dollar (USD) climbs to a two-week high after its recent recovery from a four-year low. This, in turn, is seen acting as a headwind for the precious metal. Meanwhile, Iran and the US have agreed to hold talks in Oman on Friday, easing concerns over a military confrontation. This, along with a fall in China's gold consumption in 2025, further contributes to capping the commodity's upside.
The USD bulls, however, seem reluctant to place aggressive bets due to prospects for lower US interest rates, bolstered by Wednesday's softer US ADP report, which pointed to labor market weakness. This helped the non-yielding Gold to recover over $100 from the daily swing low. Moreover, geopolitical risks help limit the downside for the safe-haven commodity. Hence, it will be prudent to wait for strong follow-through selling before positioning for an extended corrective decline from the all-time peak.
Daily Digest Market Movers: Gold continues to be undermined by modest USD strength
- China's gold consumption in 2025 fell 3.57% to 950.096 metric tons, the state-backed association said on Thursday. Gold output using domestic raw materials climbed 1.09% year on year to 381.339 metric tons, the association added.
- US President Donald Trump’s nomination of Kevin Warsh as the next Federal Reserve chair fueled speculation that the central bank will be less dovish than expected. This assists the US Dollar in gaining some follow-through positive traction.
- Trump, however, said that he would have passed on Kevin Warsh as his nominee for the Fed Chair if he had expressed a desire to hike interest rates and that there was not much doubt that the US central bank would lower interest rates.
- Moreover, traders are still pricing in the possibility that the Fed will lower borrowing costs two more times this year. The bets were further reaffirmed by Wednesday's disappointing release of the US private-sector employment data.
- In fact, the Automatic Data Processing (ADP) Research Institute reported that private-sector employers added 22K new jobs in January, down from the previous month's downwardly revised reading of 37K and 48K consensus estimates.
- Separately, the US ISM Services PMI held steady at 53.8 in January and pointed to another robust expansion in the sector, providing a modest lift to the USD and exerting pressure on the Gold during the Asian session on Thursday.
- Meanwhile, Iran and the US remain at odds over the latter's demand that negotiations cover Tehran's missile arsenal and Iran's insistence on discussing only its nuclear program. This could further act as a tailwind for the safe-haven commodity.
- Analysts at UBS in a recent note rated gold as an attractive hedge and suggested that the bull market is not yet over, projecting that prices can rise to $6,200 an ounce (oz) by mid-2026, up nearly 25% from the current levels.
- Traders now look to Thursday's US economic docket, featuring the release of the delayed JOLTS Job Openings data and the usual Weekly Initial Jobless Claims. This, along with Fed speak, could influence the buck and the XAU/USD pair.
Gold bears have the upper hand while below the $5,000 mark
The overnight failure ahead of the $5,100 mark and the subsequent downfall back the case for a further near-term depreciating move for the Gold. The Moving Average Convergence Divergence (MACD) line stands above the Signal line and above zero, while a contracting positive histogram suggests momentum is cooling. The Relative Strength Index (RSI) prints at 46, neutral and below its midline.
However, the 200-period Simple Moving Average (SMA) rises to $4,677.91, with the Gold price holding above it and retaining an upside bias. Measured from the $5,597.45 high to the $4,390.81 low, the 50% retracement level at $4,994.13 acts as initial resistance, and a breakout could target the 61.8% Fibonacci retracement at $5,136.51. A close above the said hurdle would strengthen the bullish tone and open the way for further recovery.
Near-term traction is mixed as MACD’s positive bias eases and RSI remains sub-50, keeping price action contained below nearby resistance. Failure to clear $4,994.13 would keep the range intact, while dips would be cushioned by the rising 200-period SMA around $4,677.91.
(The technical analysis of this story was written with the help of an AI tool.)
Economic Indicator
Initial Jobless Claims
The Initial Jobless Claims released by the US Department of Labor is a measure of the number of people filing first-time claims for state unemployment insurance. A larger-than-expected number indicates weakness in the US labor market, reflects negatively on the US economy, and is negative for the US Dollar (USD). On the other hand, a decreasing number should be taken as bullish for the USD.
Read more.Next release: Thu Feb 05, 2026 13:30
Frequency: Weekly
Consensus: 212K
Previous: 209K
Source: US Department of Labor
Every Thursday, the US Department of Labor publishes the number of previous week’s initial claims for unemployment benefits in the US. Since this reading could be highly volatile, investors may pay closer attention to the four-week average. A downtrend is seen as a sign of an improving labour market and could have a positive impact on the USD’s performance against its rivals and vice versa.
MUFG Senior Currency Analyst Lee Hardman discusses the upcoming ECB policy meeting and its implications for the Euro. The EUR/USD has dipped below the 1.1800-level after reaching a high of 1.2081 last week. Hardman expects the ECB to maintain its current policy stance, with a higher risk of further easing rather than a rate hike. The Euro's strength has raised concerns among ECB policymakers, but significant pushback is not anticipated at the meeting.
Market expectations for ECB meeting
"We are not expecting today’s ECB policy meeting to provide a fresh catalyst for euro performance in the near-term. The ECB are likely to reiterate that they are comfortable with their current policy stance but are unlikely to completely rule out the prospect of further easing."
"We expect the ECB to leave their policy rate on hold through 2026, but judge that there is a higher risk of another cut than a hike given inflation is likely to undershoot their target."
"A couple of ECB policymakers expressed some concern over euro strength last week when EUR/USD rose briefly above 1.2000, but we doubt that they will push back strongly at today’s policy meeting."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- AUD/USD trades lower to near 0.6980 as the US Dollar remains firm.
- Weak Fed dovish speculation for the next two policy meetings supports the US Dollar.
- The RBA keeps the door open for further interest rate hikes.
The AUD/USD pair is down 0.22% lower to near 0.6980 during the European trading session on Thursday. The Aussie pair has come under pressure as the US Dollar (USD) trades firmly on expectations that the Federal Reserve (Fed) will hold interest rates steady in the next two policy meetings in March and April.
At the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades firmly near an over-a-week high of 97.80.
Fed dovish speculation remains choked as the United States (US) inflation has remained well above the central bank’s 2% target. On Wednesday, Fed Governor Lisa Cook also signaled that monetary policy adjustments are inappropriate unless price pressures start cooling down. “It is the right time to sit back and wait to see what happens,” Cook said.
Meanwhile, the Australian Dollar (AUD) is broadly upbeat as the Reserve Bank of Australia (RBA) has signaled that interest rates could be raised further to tighten its grip on accelerating price pressures.
AUD/USD technical analysis
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AUD/USD trades lower at around 0.6982 during the press time. The 20-day Exponential Moving Average (EMA) rises steadily, underscoring a firm bullish trend. Price holds above the 20-day EMA, with the 20-day EMA at 0.6884 providing initial support.
The 14-day Relative Strength Index (RSI) at 66 (bullish) has eased from prior overbought readings, keeping momentum positive.
Upside would extend while the pair holds above the rising average, with pullbacks expected to be contained by trend support. RSI below 70 signals manageable momentum; a renewed push into the overbought band could fuel continuation, while fading impulse would open room for mean reversion toward the moving average.
(The technical analysis of this story was written with the help of an AI tool.)
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
- GBP/JPY returns beyond 214.00, drawing closer to the 16-year high, at 215.00.
- The BoE decision, due later on Thursday, is likely to set the Pound's direction.
- The Yen remains on its back foot ahead of Japan's snap elections.
The Pound has retraced previous losses and is trading higher against an ailing Japanese Yen in Thursday’s early London session. Bulls have pushed the pair back above 214.00 at the time of writing, on track to a five-day rally and with the 16-year high, at 215.00 coming closer.
Investors, however, are likely to remain cautious ahead of the Bank of England’s (BoE) monetary policy decision, due later on Thursday.
The bank is widely expected to leave its benchmark interest rate unchanged at 3.75% as inflation remains stubbornly high and economic growth shows signs of improvement. The voting split is expected to show two dissenters calling for a quarter-point rate cut; anything below that will be seen as hawkish and is likely to boost the Pound across the board.
The Yen, on the other hand, remains vulnerable with investors holding their breath ahead of next weekend's snap elections. Markets are wary that Prime Minister Takaichi might obtain a stronger parliamentary support to extend her expansive policies and boost an already high fiscal deficit.
A newspaper report released earlier this week revealed that the Liberal Democratic Party (LDP) might get as many as 300 of the 450 seats in the lower house, a landslide victory that would allow the Prime Minister to rule without a coalition, the most feared scenario for the market.
Earlier on Thursday, a 30-year Japanese Government Bond (JGB) auction closed with stronger demand than usual, which calmed markets and provided some support to the Yen. The yield of the 30-year note eased to 3.5% from all-time highs at 3.65%, and the 20-year yield eased to 3.13% from highs near 3.20% before the auction.
Economic Indicator
BoE Interest Rate Decision
The Bank of England (BoE) announces its interest rate decision at the end of its eight scheduled meetings per year. If the BoE is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Pound Sterling (GBP). Likewise, if the BoE adopts a dovish view on the UK economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for GBP.
Read more.Next release: Thu Feb 05, 2026 12:00
Frequency: Irregular
Consensus: 3.75%
Previous: 3.75%
Source: Bank of England
Economic Indicator
BoE MPC Vote Rate Unchanged
Interest rates are set by the Bank of England’s (BoE) Monetary Policy Committee (MPC). The MPC sets an interest rate it judges will enable the BoE’s inflation target to be met. It is comprised of nine members – the Governor, the three Deputy Governors, the Bank's Chief Economist and four external members appointed directly by the Chancellor. Investors look at each member’s vote in order to seek cues over how unanimous was the decision on interest rates.
Read more.Next release: Thu Feb 05, 2026 12:00
Frequency: Irregular
Consensus: 7
Previous: 4
Source: Bank of England
Crude oil prices continued to rise, driven by renewed tensions between the US and Iran. Reports indicate that US President Trump has issued warnings to Iran while military forces are gathering in the region. The London Brent oil futures increased by $1.34 to settle at $68.67 per barrel, while NY WTI rose by $1.93 to $65.14 per barrel, notes UOB's Global Economics & Markets Research Team.
Oil prices increase on geopolitical concerns
"Crude oil prices rose further on Wed, as conflicting reports stoked concerns about US-Iran tensions."
"US President Trump renewed warnings to Iran’s leaders as US military forces gather in the region, even as diplomacy appeared to be on track, with Tehran confirming nuclear talks with the US will take place in Oman on Fri (6 Feb)."
"Meanwhile, EIA reported that US crude inventories fell by 3.46 million barrels last week while output in the Lower 48 dropped to the lowest since Nov 2024 as freezing temperatures disrupted drilling."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Silver rebounds after plunging over 16% as hawkish Fed signals and easing geopolitics pressured precious metals.
- Fed’s Cook said she won’t support further rate cuts without clearer evidence that inflation is easing.
- Safe-haven demand for Silver eases after Iran confirms talks with the US in Oman on Friday.
Silver price (XAG/USD) pares its daily losses, yet remains in the negative territory, trading around $80.50 per troy ounce during the early European hours on Thursday. Silver price plunged as much as over 16% as precious metals faced renewed selling pressure amid hawkish signals from the Federal Reserve (Fed) and easing geopolitical tensions.
Fed Governor Lisa Cook said she would not back another cut without clearer evidence that inflation is easing, stressing greater concern over stalled disinflation than labor market weakness. Investors also weighed the implications of Kevin Warsh’s nomination as Fed chair, citing his preference for a smaller balance sheet and a less aggressive approach to rate reductions.
Safe-haven demand for precious metals, including Silver, fades after Iran confirmed it would hold talks with the United States (US) in Oman on Friday. However, Silver prices gained ground on media reports suggesting the talks might collapse, but officials from both sides later said discussions would proceed as scheduled, even though the agenda remains unsettled.
Iranian Foreign Minister Abbas Araghchi said talks will be held in Oman on Friday, while a White House official confirmed continued engagement on a potential nuclear deal. Uncertainty persists over the scope, with Tehran aiming to limit discussions to its nuclear program and Washington seeking to include missiles, regional militancy, and human rights.
The dollar-denominated grey metal also fell as a stronger US Dollar (USD), driven by hawkish Fed signals and slower rate-cut expectations, weighed on the Silver price. A firmer Greenback raises Silver’s cost for non-US buyers, dampening demand, while higher US yields increase the opportunity cost of holding non-yielding metal.
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
Here is what you need to know on Thursday, February 5:
Investors move to the sidelines and markets turn quiet early Thursday ahead of key events. The Bank of England (BoE) and the European Central Bank (ECB) will both announce monetary policy decisions later in the session. The US economic calendar will feature the weekly Initial Jobless Claims data, alongside the JOLTS Job Openings report for December.
The US Dollar (USD) gathered strength against its rivals in the second half of the day on Wednesday despite the mixed macroeconomic data releases. The Automatic Data Processing (ADP) reported that employment in the private sector rose 22K in January, missing the market expectation of 48K. On a positive note, the Institute for Supply Management's (ISM) Services Purchasing Managers' Index (PMI) held steady at 53.8, reflecting an ongoing expansion in the service sector's business activity at a robust pace. After closing in positive territory on Wednesday, the USD Index holds steady at around 97.70 in the European session on Thursday.
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.39% | 0.51% | 1.35% | 0.54% | -0.46% | 0.26% | 0.67% | |
| EUR | -0.39% | 0.08% | 0.98% | 0.14% | -0.86% | -0.11% | 0.27% | |
| GBP | -0.51% | -0.08% | 0.79% | 0.06% | -0.93% | -0.20% | 0.19% | |
| JPY | -1.35% | -0.98% | -0.79% | -0.81% | -1.81% | -1.02% | -0.94% | |
| CAD | -0.54% | -0.14% | -0.06% | 0.81% | -0.95% | -0.23% | 0.13% | |
| AUD | 0.46% | 0.86% | 0.93% | 1.81% | 0.95% | 0.75% | 1.13% | |
| NZD | -0.26% | 0.11% | 0.20% | 1.02% | 0.23% | -0.75% | 0.38% | |
| CHF | -0.67% | -0.27% | -0.19% | 0.94% | -0.13% | -1.13% | -0.38% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
The US Bureau of Labor Statistics announced late Wednesday that the postponed Nonfarm Payrolls data will be published next Wednesday, February 11, and the release date of the Consumer Price Index (CPI) will be moved to February 13 from the originally planned February 11.
The ECB is widely expected to keep key rates unchanged after the February meeting. Investors, however, will pay close attention to how the ECB assesses downside risks to inflation, given the recent Euro strength and the Harmonized Index of Consumer Prices (HICP) data. Eurostat reported on Wednesday that the HICP rose 1.7% on a yearly basis in January, compared to the 1.9% increase recorded in December. After posting marginal losses on Wednesday, EUR/USD moves sideways at around 1.1800 in the European morning on Thursday.
The BoE is anticipated to maintain the bank rate at 3.75%. The vote split and BoE Governor Andrew Bailey's comments in the post-meeting press conference could drive Pound Sterling's valuation. As of writing, GBP/USD was down 0.2% on the day at 1.3625.
Following Tuesday's rally, AUD/USD corrected lower on Wednesday. The pair struggles to regain its traction and trades below 0.7000 in the European morning.
Gold extended its rebound in the first half of the day on Wednesday but met resistance above $5,000. XAU/USD edges lower early Thursday and trades below $4,950. After posting gains for two consecutive days, Silver turns south on Thursday and trades below $81, losing more than 8% on the day.
USD/JPY continues to push higher and trades near 157.00 after rising nearly 0.7% on Wednesday.
Central banks FAQs
Central Banks have a key mandate which is making sure that there is price stability in a country or region. Economies are constantly facing inflation or deflation when prices for certain goods and services are fluctuating. Constant rising prices for the same goods means inflation, constant lowered prices for the same goods means deflation. It is the task of the central bank to keep the demand in line by tweaking its policy rate. For the biggest central banks like the US Federal Reserve (Fed), the European Central Bank (ECB) or the Bank of England (BoE), the mandate is to keep inflation close to 2%.
A central bank has one important tool at its disposal to get inflation higher or lower, and that is by tweaking its benchmark policy rate, commonly known as interest rate. On pre-communicated moments, the central bank will issue a statement with its policy rate and provide additional reasoning on why it is either remaining or changing (cutting or hiking) it. Local banks will adjust their savings and lending rates accordingly, which in turn will make it either harder or easier for people to earn on their savings or for companies to take out loans and make investments in their businesses. When the central bank hikes interest rates substantially, this is called monetary tightening. When it is cutting its benchmark rate, it is called monetary easing.
A central bank is often politically independent. Members of the central bank policy board are passing through a series of panels and hearings before being appointed to a policy board seat. Each member in that board often has a certain conviction on how the central bank should control inflation and the subsequent monetary policy. Members that want a very loose monetary policy, with low rates and cheap lending, to boost the economy substantially while being content to see inflation slightly above 2%, are called ‘doves’. Members that rather want to see higher rates to reward savings and want to keep a lit on inflation at all time are called ‘hawks’ and will not rest until inflation is at or just below 2%.
Normally, there is a chairman or president who leads each meeting, needs to create a consensus between the hawks or doves and has his or her final say when it would come down to a vote split to avoid a 50-50 tie on whether the current policy should be adjusted. The chairman will deliver speeches which often can be followed live, where the current monetary stance and outlook is being communicated. A central bank will try to push forward its monetary policy without triggering violent swings in rates, equities, or its currency. All members of the central bank will channel their stance toward the markets in advance of a policy meeting event. A few days before a policy meeting takes place until the new policy has been communicated, members are forbidden to talk publicly. This is called the blackout period.
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