Start Learning Forex Now: We Provide Tutorial in EN / 中文.
Forex Malaysia 马来西亚外汇

Fundamental Analysis 基本面分析: Page 3 of 7

Facebook icon

How Monetary Policy Affects the Forex Market

As we mentioned earlier, national governments and their corresponding central banking authorities formulate monetary policy to achieve certain economic mandates or goals.

Central banks and monetary policy go hand-in-hand, so you can’t talk about one without talking about the other.

While some of these mandates and goals are very similar between the world’s central bank, each have their own unique set of goals brought on by their distinctive economies.

Ultimately, monetary policy boils down to promoting and maintaining price stability and economic growth.

To achieve their goals, central banks use monetary policy mainly to control the following:

  • the interest rates tied to the cost of money,
  • the rise in inflation,
  • the money supply,
  • reserve requirements over banks,
  • and discount window lending to commercial banks

Types of Monetary Policy

Monetary policy can be referred to in a couple different ways. Contractionary or restrictive monetary policy takes place if it reduces the size of the money supply. It can also occur with the raising of interest rates.

The idea here is to slow economic growth with the high interest rates. Borrowing money becomes harder and more expensive, which reduces spending and investment by both consumers and businesses.

Expansionary Monetary Policy

Expansionary monetary policy, on the other hand, expands or increases the money supply, or decreases the interest rate.

The cost of borrowing money goes down in hopes that spending and investment will go up.

Accommodative monetary policy aims to create economic growth by lowering the interest rate, whereas tight monetary policy is set to reduce inflation or restrain economic growth by raising interest rates.

Finally, neutral monetary policy intends to neither create growth nor fight inflation.

The important thing to remember about inflation is that central banks usually have an inflation target in mind, say 2%.

They might not come out and say it specifically, but their monetary policies all operate and focus on reaching this comfort zone.

They know that some inflation is a good thing, but out-of-control inflation can remove the confidence people have in their economy, their job, and ultimately, their money.

By having target inflation levels, central banks help market participants better understand how they (the central bankers) will deal with the current economic landscape.

Let’s take a look at an example.

Back in January of 2010, inflation in the U.K. shot up to 3.5% from 2.9% in just one month. With a target inflation rate of 2%, the new 3.5% rate was well above the Bank of England’s comfort zone.

Mervyn King, the governor of the BOE, followed up the report by reassuring people that temporary factors caused the sudden jump, and that the current inflation rate would fall in the near term with minimal action from the BOE.

Whether or not his statements turned out to be true is not the point here. We just want to show that the market is in a better place when it knows why the central bank does or doesn’t do something in relation to its target interest rate.

Simply put, traders like stability.

Central banks like stability.

Economies like stability. Knowing that inflation targets exist will help a trader to understand why a central bank does what it does.

Round and Round with Monetary Policy Cycles

For those of you that follow the U.S. dollar and economy (and that should be all of you!), remember a few years back when the Fed increased interest rates by 10% out of the blue?

It was the craziest thing to come out of the Fed ever, and the financial world was in an uproar!

Wait, you don’t remember this happening?

It was all over the media.

Petroleum prices went through the roof and milk was priced like gold.

You must have been sleeping!

Oh wait, we were just pulling your leg!

We just wanted to make sure you were still awake. Monetary policy would never dramatically change like that.

Most policy changes are made in small, incremental adjustments because the bigwigs at the central banks would have utter chaos on their hands if interest rates changed radically.

Just the idea of something like that happening would disrupt not only the individual trader, but the economy as a whole.

That’s why we normally see interest rate changes of .25% to 1% at a time. Again, remember that central banks want price stability, not shock and awe.

Part of this stability comes with the amount of time needed to make these interest rate changes happen. It can take several months to even several years.

Monetary Policy Rate Hikes

Just like forex traders who collect and study data to make their next move, central bankers do a similar job, but they have to focus their decision-making with the entire economy in mind, not just a single trade.

Interest rate hikes can be like stepping on the brakes while interest rate cuts can be like hitting the accelerator, but bear in mind that consumers and business react a little more slowly to these changes.

This lag time between the change in monetary policy and the actual effect on the economy can take one to two years.

央行货币政策如何影响汇市

       我们之前提到过,货币政策是指政府或中央银行为影响经济活动所采取的措施,尤指控制货币供给以及调控利率的各项措施。用以达到特定或维持政策目标——比如,抑制通胀、实现完全就业或经济增长。

       央行和货币政策是不分家的,我们在提到央行或货币政策时,不可避免的会谈论到二者中的另外一个。

       尽管一些使命和目标为不同央行所共有,但由于经济的差异性,央行也有其特有的政策目标。

       货币政策的终极目标在于维持物价的稳定以及促进经济的增长。

       为达到这些目标,央行会使用货币政策来控制以下几个方面:

           ● 利率

           ● 通胀

           ● 货币供给

           ● 存款准备金

           ● 贴现窗口融资

货币政策类别

       货币政策可以分为不同的类别。如果央行降低货币供给,或采取加息措施,则称为紧缩型货币政策。

       紧缩型货币政策的目的在于抑制经济的过快增速。加息将导致更高的借贷成本,这将降低消费和投资。

       另一方面,如果增加货币供给或采取降息措施,则称为扩张型货币政策。
   
       降息的目的在于促进消费和投资。

       扩张型货币政策目的在于通过降息或扩大货币供应量来促进经济增长,而紧缩型货币政策则为了抑制通胀或抑制经济过快增长。

       最后,中性货币政策目的在于,既不会促进经济增长,也不会抑制通胀。

       有一点我们需要牢牢记住,即央行通常会设定2%的通胀目标。

       可能一些央行并不会明确说明其通胀目标,但是它们的货币政策操作都致力于将通胀维持在一个合理区间水平。

       它们知道,适度的通胀对经济有利,但是过度的通胀则会影响人们的信心、影响到人们的就业、最终影响到他们的钱包。

       通过设定通胀目标,市场参与人士可以更好的知晓,央行将如何应对当前的经济局面。

       让我们举例说明。

       回到2010年1月,英国当时的通胀年率增长3.5%,前一个月为增长2.9%。由于英国央行所设定的通胀目标为2%,3.5%的通胀率明显远远超出英国央行的这一目标。

       为了安慰不安的人们,英国央行行长金恩随即表示,临时性因素导致通胀水平出现较大幅度增长,当前通胀率将在短期以内下滑,英国央行并不会采取特别的行动。

       他的声明后来被证明是否正确并不是我们这里讨论的重点。我们只是需要向大家说明,当投资者明白央行的政策意图时,通常会处在较为有利的位置。

       简单来说,交易者们都喜欢稳定。

       央行也喜欢稳定。

       经济体喜欢稳定。了解通胀目标的存在,将帮助交易者了解,为什么央行或采取不同的货币政策。

货币周期

       大多数情况下,央行的货币政策都是小幅调整的,这是因为,如果利率变动过于迅速,可能对市场造成混乱。

       央行货币政策在短时间内的大幅变动,不仅仅会对交易者造成不利影响,也会对经济造成冲击。

       这也是为什么,我们一般看到利率单次调整幅度介于0.25%-1.0%之间。再次说明一下,央行希望维持物价稳定,不希望看到市场出现剧烈动荡。

       央行对政策稳定性的偏好决定了,利率出现大幅变动需要一段相当长的时间。这段时间可能是数月,甚至是数年之久。

      

       和交易者喜欢收集和研究数据以便为下一步交易行动提供依据一样,央行也喜欢做类似的工作,但是,央行所关注的重点是整个经济体,而非仅仅的一次交易。

       央行加息就好比刹车,而降息则好比踩油门,但是,请记住,消费者和企业对加息或将息的反应较为缓慢。

       货币政策变动及对经济所造成的实际影响之间的时间差通常为1到2年。