ECB – what does the trader need to know?




New traders are looking at the news from the ECB, because the press, radio and television suggest that they are very important and influence foreign exchange trading. That is also largely true. Unfortunately, many, besides the name of this institution, do not know much about the importance of the individual institutions and tasks for international foreign exchange trading. In the following text, traders who still have shortcomings should receive important information.


Structure of the ECB
Only those areas that are important for forex trading should be mentioned here. These are financial market operations, financial stability, research, international & European relations and risk management and economics. In these areas, important information is collected, processed and evaluated for the decisions of the ECB. To illustrate this, the most important areas of responsibility of the departments are mentioned.


– Financial market operations Analysis of financial market operations
Bond markets & International financial market operations


Financial operations


Money Market & Liquidity


Systems for financial market operations


– Financial stability
Financial Stability Assessment


Financial Services Policy


Monitoring Financial stability


– Research
Financial market Research


Monetary policy Research


– International & European relations
Foreign economic development


EU Institutions & Forums (including the representative office of the ECB in Brussels)


International Relations & Cooperation


International economic Policy Analysis


– Risk Management


Risk strategy


– Economics
Fiscal Policy


Monetary policy situation


Monetary policy Strategy


Capital Markets/Financial structure


EU countries


Macroeconomic development in the euro area


Just looking at this overview, the trader shows how complex the structure is and thus the tasks to be accomplished.


The Governing Council
The Governing Council is the supreme decision-making body of the European Central Bank. Here are the six members of the Executive Board and the Presidents of the national central banks of the euro area Member States. Its tasks are to adopt the guidelines and decisions necessary to carry out the tasks conferred on the Eurosystem and to define the monetary policy of the euro area. Decision-making on monetary policy objectives, key interest rates and the provision of central bank money in the Eurosystem and the formulation of guidelines for the implementation of the aforementioned decisions are the contents of the activities.


The Governing Council normally meets twice a month. At the first meeting, it will carry out an assessment of economic and monetary developments. It sums up the monthly monetary policy decision. The second session focuses on issues that arise from the other tasks and responsibilities of the ECB and the Eurosystem. The minutes of the meetings of the Governing Council will not be published, however, the monetary policy decision important for the trader immediately after the first meeting of the month.


The most important information for trading
The information on the interest rate policy of the central bank is always particularly important. Key interest rates are a reflection of the euro area economy and its development. They provide information on inflationary or opposite developments. This information must necessarily be included in the trader’s fundamental analysis. Only by observing the information and instilling it in the trading strategy will the trader guarantee success and protect against losses. Since there are a lot of historical values, the trader can understand the interaction between ECB decisions and price development. Anyone who wants to succeed should do this.