Central banks play a crucial role in shaping forex market dynamics through their monetary policies. Interest rate decisions, in particular, are a key driver of currency value. This topic explores how changes in interest rates by major central banks (like the Federal Reserve, European Central Bank, and Bank of Japan) influence currency pairs. It covers the relationship between interest rate differentials and forex trends, the role of economic indicators such as inflation and employment in these decisions, and strategies traders can use to anticipate and react to central bank announcements.