What will central banks decide next week? Octa analysts share their opinion.
Market Anticipation of Central Bank Decisions
When it comes to forex trading, central bank decisions can make or break your strategy. Next week, the Bank of Canada (BoC) and the European Central Bank (ECB) are set to reveal their verdicts on interest rates. These announcements will have a significant impact on the market, and it’s crucial for traders and investors to stay informed.
Bank of Canada’s Expected Policy Decision
The Bank of Canada (BoC) is scheduled to announce its rate decision on January 24th at 3:00 p.m. UTC. While the market predicts that BoC will maintain its overnight rate at 5%, inflation concerns might prevent a dovish stance. Investors are watching closely for Governor Tiff Macklem’s comments during the press conference, as they may hint at a cautiously hawkish approach.
European Central Bank’s Policy Update
On January 25th at 1:15 p.m. UTC, the European Central Bank (ECB) will release its monetary policy updates. Most economists expect the ECB to keep its refinancing rate at 4.50% and the deposit rate at 4.0%. However, mixed signals from ECB officials have caused uncertainty, leading to volatile EUR pairs. The market awaits clarification on the ECB’s stance regarding future rate cuts.
Impact on Currency Pairs
The market currently leans towards a dovish sentiment, but any unexpected hawkish remarks from central bankers could trigger above-average volatility in forex trading. Watch for potential shifts in currency pairs like USDCAD and EURUSD based on these central bank decisions.
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