How to Anticipate Monetary Policy It would be great if investors had a crystal ball to tell them what direction the Fed is going next.
With your ability to understand the interest rate policy of the currency being traded, this can increase the chances of getting a bigger profit.
They tend to pay steady dividends, which become more enticing in situations that cause the Fed to lower rates.
This is policy makers trying to be as transparent as possible in their communications to the market about where monetary policy may be heading.
Hawkish and dovish policies have enormous effect on currency rates via a mechanism central bankers.
But the frequency can change depending on the central bank in question.