It looks like some majors are off to start September with a bang! Check out these five interest rate decisions lined up this week and how you could trade ’em!
1. Reserve Bank of Australia (Tuesday, 4:30 am GMT)
In their previous interest rate statement, the RBA cut interest rates by 0.25%, surprising some market participants. They cited the expected downturn in the mining industry as a risk to overall growth, which was why they thought additional stimulus was needed.
This time around, no monetary policy changes are expected. Note though that the Australian economy has been underperforming recently, which suggests that the Aussie might be weighed down by dovish comments from RBA head Stevens.
2. Bank of Canada (Wednesday, 2:00 pm GMT)
The BOC did not make any actual interest rate changes in their previous statement but Poloz did make some adjustments to his language in signaling that the Canadian central bank was in no rush to hike rates.
BOC head Poloz is expected to simply reiterate his monetary policy stance this time around and make no changes to interest rates. However, the Canadian economy has also slowed down recently, which could mean that a few downbeat comments could be in the cards. Brace yourselves for a potential Loonie selloff if that happens!
3. Bank of Japan (Thursday)
Ever since the BOJ unveiled its massive quantitative easing program in April, it hasn’t made any new adjustments to monetary policy. With that, BOJ head Kuroda is still likely to stand pat in the upcoming monetary policy decision but possibly give a time frame on how long their easing program would last.
Word through the forex grapevine is that BOJ Deputy Governor Iwata mentioned that the BOJ will keep monetary policy unchanged for the rest of the year and even throughout 2014. If Kuroda adopts forward guidance and confirms this, it could spark further yen weakness.
4. Bank of England (Thursday, 7:00 am GMT)
Last month Mark Carney and his gang unanimously decided to keep the BOE’s interest rates and asset purchases steady, but what got the market geeks talking is that voting member Martin Weale surprisingly voiced his concern over Carney’s forward guidance, hinting that the time frame for keeping interest rates low might be too long.
Will the BOE support whispers that they might raise interest rates sooners than planned after all? The central bank isn’t expected to change any of its policies this week, but many would stay tuned and watch if Carney would highlight the recent improvements in the economy and hint at any possible changes to his forward guidance plan.
5. European Central Bank (Thursday, 7:45 am GMT)
Last on stage this week is Mario Draghi and his ECB friends, who aren’t expected to change the central bank’s policies this week. If you remember, Draghi didn’t introduce any fireworks last month as he basically just reiterated the ECB’s own forward guidance plans.
This time around the investors are likely to watch Draghi’s accompanying press conference more than the actual monetary policy statement as he could give hints on what the central bank thinks about Germany’s recent weaknesses or the underperformance of the peripheral nations’ economic data. If he sounds surprisingly dovish or hawkish, then we might see convincing breakouts in some of the euro ranges seen across the charts.
Which among these central bank statements do you plan on trading? Let us know by voting through the poll below!