Why is the dollar the world's reserve currency, and does it matter to you?
Central banks hold dollars, trade settles in dollars, and commodities are priced in dollars. The reserve status gives the dollar a structural bid and makes US policy everyone's problem.
Beginners: what does reserve status actually mean for a currency? Experienced members: when does it matter for your trades and when is it just trivia?
The DXY guide and how interest rates move currencies are good background.
Background: How interest rate decisions move currencies
Central bank decisions are the biggest scheduled events in forex. Why rates matter, why a hike can weaken a currency, and what to read beyond the decision.
Does a rate hike always strengthen a currency?
No. If the hike was fully expected, it is already in the price. The currency can even weaken if the central bank signals that it won't raise rates further.
What does hawkish mean?
Leaning towards higher interest rates to control inflation. A hawkish surprise usually supports the currency.
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