Dove definition

A dove is a central bank policymaker who favours lower interest rates and looser monetary policy to support growth and employment. The label is applied to members of bodies such as the Federal Reserve, the European Central Bank, and the Bank of England.

A dove tends to back lower rates because cheaper borrowing can lift consumer spending, business investment, and credit growth. When the economy slows, a dove may also support quantitative easing, bond purchases, or other liquidity measures to keep financial conditions easy.

A dove is the opposite of a hawk, who favours higher interest rates to keep inflation in check. Traders watch the balance between the two on a central bank's committee, because a dovish shift tends to weaken the currency and support risk assets such as shares, while a hawkish shift tends to do the reverse.