Hawkish / Dovish

Hawkish and dovish are how traders describe central bank attitudes. A hawkish central bank is worried about inflation and leans toward raising interest rates. That makes the currency MORE valuable to hold (higher yield) so the currency usually strengthens. A dovish central bank is worried about slow growth or recession and leans toward CUTTING rates. Lower yields make the currency less attractive, so it usually weakens. These are relative, not absolute. A "hawkish hold" means they didn't raise rates but sounded aggressive about future hikes — still bullish for the currency. A "dovish hike" means they raised rates but signaled they're done — bearish for the currency. Reading the TONE of central bank language is a whole skill in itself.