Central bank
A national institution that manages a currency and interest rates.
Central banks such as the Fed, the ECB, and the Bank of England try to keep inflation in check and support the economy.
A central bank manages a country or bloc currency and sets its benchmark interest rate. The Fed does it for the dollar, the European Central Bank for the euro, the Bank of England for the pound, the Bank of Japan for the yen. Most target inflation of around 2% and adjust rates to steer toward it.
The gap between two central banks is what moves an exchange rate over time. If one is raising rates while another is cutting, money tends to flow toward the higher-yielding currency, a dynamic the carry trade is built on. That is why a forex trader tracks not one central bank but the pair of them behind whatever they are trading.