Central Banks' Rate Decisions Set to Rock Global Markets
Market participants are bracing themselves for a packed week of central bank announcements. The US Federal Reserve's rate decision on Wednesday, followed by the Bank of England's decision on Thursday and Japan's Bank of Japan ruling on Friday, will set the tone for global markets.
The US dollar has gained ground as investors increasingly expect the Fed to hike rates to 4.0% from 3.75%. This expectation is weighing on risk appetite, causing equities to soften.
AUD/USD has retreated towards 0.7130, and a break below this level could trigger a further decline in the Australian dollar. Traders are advised to position long on the greenback using short-term call options ahead of the FOMC rate decision.
Oil prices have edged higher due to ongoing geopolitical tensions involving the Houthis, while gold and silver have remained steady despite the strengthening dollar.