Central Banks Take Center Stage: NZD/USD, EUR/GBP, and USD/JPY in Focus
Central bank decisions are set to be a major highlight of the week, with the Federal Reserve, Bank of England, and Bank of Japan announcing their monetary policy decisions.
The Federal Reserve is expected to raise interest rates by 25 basis points on Wednesday, September 16, with market expectations leaning towards a rate hike. The focus will be on forward guidance and clues about further increases.
New Zealand's currency, the NZD/USD, is one of the majors to watch this week, as geopolitical tensions have not eased, leaving it susceptible to weakness. The 50% retracement level around 0.5809 has held so far, keeping price above the level after sellers tested it twice in September.
The Bank of England is expected to leave interest rates unchanged at 3.75% on Thursday, September 17. While the rate decision itself may not be a major surprise, the market will pay attention to the vote split, policy statement, and meeting minutes for any hawkish or dovish changes.
The Bank of Japan is expected to raise interest rates by 25 basis points to 1.25%, with traders looking for signals on a faster pace of tightening or a cautious approach to subsequent increases.