There are many major players in the Forex market. This includes central banks, governments, banks, companies, hedge funds, investment companies, and retailers.
Central banks and governments
Market stability is a primary responsibility of central banks and governments, and they do so by using their own foreign currency reserves. However, by engaging themselves in the Forex markets, central banks and governments can coordinate the currency's rise / fall face-to-face by supplying money, influencing inflation and interest rates etc.
Central banks have a responsibility to define countries ímonetary policies by using exchange rates and other tools to influence inflation, employment, and in some cases currency rates. Fiscal policy is determined by the government, and includes budget, taxes, as well as investment measures. Monetary policy and fiscal policy affect exchange rates on a large scale and these institutions sometimes choose to interfere in foreign exchange markets to influence the value of the local currency.