Monetary Easing
a.k.a. Easing, Loosening, Dovish policy
When a central bank makes money cheaper and easier to get, by cutting rates or buying assets, to boost the economy.
Monetary easing is a central bank stepping on the gas. It cuts interest rates so loans get cheaper, or it creates money to buy bonds (quantitative easing). The goal is to get people and businesses borrowing, spending and hiring again when the economy is stalling.
For forex traders the rule of thumb is simple: easing tends to weaken a currency, because lower rates make it less rewarding to hold. That is why a surprise rate cut can send a currency sliding within seconds.
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