All central banks, including the U.S. Federal Reserve (Fed) have an impact on the foreign exchange market through changes in interest rates and foreign exchange operations (intervention purchases and currency).

Of the most significant foreign exchange for forex trading is an agreement to repurchase (repurchase agreements), providing for the re-sale of the same system previously purchased by customers currencies at the same price at the agreed time in the future (usually within 15 days) and with a certain interest rate . The volume of transactions on such an agreement corresponds to the amount of temporary injection of reserves into the banking system. The impact on the foreign exchange market is done in order to weaken its currency. Repurchase agreement may impose obligations on either the client or the bank (Fed).
Negotiated contracts for the sale of (matched sale-purchase agreements) are opposite to repurchase agreements. In carrying out the agreed contract of sale, the bank or the Fed sells a currency with a view to its immediate delivery dealer or a foreign central bank, agreeing to buy the currency back at the same price at the agreed time in the future (usually within 7 days). This agreement aims to reset the temporary reserves. The volume of transactions on such an agreement corresponds to the amount of temporary relief provisions. Effect on the market intended for the fact that, to enhance its currency.
Among the foreign currency transactions is placing money in the other central banks or mezhdunarodnh funds. In addition, the Fed since 1962., Has signed a number of agreements with other central banks on currency exchange. For example, to help the allies in the war to liberate Kuwait from Iraqi occupation in 1991: 1990. Bundesbank and the Bank of Japan placed the money in the Fed. Through other central banks made U.S. contributions to the World Bank and the United Nations etc..
Intervention in the foreign exchange market by the Treasury and the Fed are aimed at ensuring orderly market or exchange rate management. They are not intended to affect the state’s financial reserves.
There are two types of currency interventions: naked (naked intervention) and sterile (sterilized).
Naked, or unsterilized intervention is associated exclusively with foreign exchange trading. Everything that happens in this case – it is the purchase or sale of the Federal System of dollars for foreign currency. In addition to the impact on the foreign exchange market, while there is a change in financial situation due to the inflow or outflow of money. A noticeable change in the financial flows makes it necessary to adjust the size of the dividend payment, to change the prices and to make other amendments at all levels of the economy. Therefore, the effect of naked foreign exchange intervention is long-lasting.
Sterilized intervention is neutral in terms of its impact on cash flow. Since not many central banks have
they want their intervention in the currency markets tially all aspects of the economy, sterilized intervention is preferable. The same applies to the Federal Reserve. Sterilized intervention involves an additional measure in the original currency of the transaction. This measure is to sell government securities, compensating increase in provisions due to the intervention. It is easier to understand if you imagine that the central bank intends to finance the transaction currency by selling a certain amount of government securities. Since sterile intervention affects only the level of supply and demand separate currency, its effect is short-term or medium-term.