Back to Glossary
General TradingC

Central Bank Intervention

Central Bank Intervention refers to actions taken by a central bank to influence the value of its currency in foreign exchange markets, typically through buying or selling its own currency. This is done to stabilize exchange rates, combat excessive volatility, or correct misalignments in the currency's value. Forex traders closely monitor signals of potential intervention, as these actions can cause sharp, sudden price moves that override existing technical setups.

Example

The Bank of Japan's surprise intervention in the yen sent USD/JPY plunging 500 pips in a matter of hours.