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Get ready for a blockbuster period in global markets!
Four of the world's most powerful central banks are announcing policy decisions over a 20-hour span:
Wednesday, March 18 @ 6:00PM UTC: Federal Reserve a.k.a. The Fed
Thursday, March 19 around 3:00AM UTC: Bank of Japan (BoJ)
Thursday, March 19 @ 12:00PM UTC: Bank of England (BoE)
Thursday, March 19 @ 1:15PM UTC: European Central Bank (ECB)
To be clear, markets expect no rate changes by any of these major central banks this week; doing so would be a major shock for markets worldwide!
Instead, as we had cited in our report published Monday, March 16th:
Central bank decisions, and future plans, on interest rates drive major moves across practically every major asset class in global markets.
These moments create prime trading opportunities as markets react instantly to policy signals.
24/5 direct access: These "majors" are traded round the clock on weekdays, while offering direct exposure to the different interest rate outlooks for these major global economies. In other words, FX pairs let you trade both sides of the central bank story - going long (buy) or short (sell) based on which economy offers better rates.
Potential profits either direction: This ability to potentially profit no matter if the FX pair rises or falls, provided you've anticipated the correct direction, gives you maximum flexibility no matter which way the policy winds blow.
This makes major FX pairs a trader's delight for capturing the market-moving moments/comments/tones/signals when Powell, Ueda, Lagarde, and Bailey reveal their policy plans.
Wednesday @ 6:00PM UTC: FOMC releases policy statement, dot plot
NOTE: The Federal Open Market Committee is the policy-making arm of the Federal Reserve, comprising 12 voting members at the that decides where to set interest rates.
Fed's dot plot: shows each FOMC member's outlook on interest rate levels.
Here's what the dot plot looked like in December 2025, with the median estimate showing just 1 rate cut in 2026.
Key question: Will the Fed still cut rates this year, or stand pat for months?
After all, the Middle East conflict has sent oil prices soaring and gas prices spiking, which could lead to an inflation shock in the world's largest economy.
Market expectations: Analysts believe the incoming dot plot will continue to show just one cut for the remainder of 2026, with market forecasts agreeing as much for the time being. However, some see the potential for zero cuts until 2027 given the still-solid U.S. economy.
@ 6:30PM UTC: Fed Chair Jerome Powell begins press conference - Powell's tone may be the key market-moving event.
POTENTIAL SCENARIOS:
USD may strengthen if the Fed's policy statement, dot plot, and/or Chair Powell, suggest no more US rate cuts in 2026 as policymakers brace for an inflation shock stemming from the ongoing Middle East conflict (higher oil prices).
USD may weaken if the Fed's policy statement, dot plot, and/or or Chair Powell, suggest that US interest rate cuts can resume later this year, perhaps viewing oil's surge to have just a temporary effect on inflation.
NOTE: A central bank raises interest rates, or keeps them elevated, as the primary tool to cool down inflation.
A currency tends to rise at the thought of its country's interest rates moving up/staying higher, and vice versa.
Thursday around 3:00AM UTC: BoJ releases policy decision
Key question: Can the BoJ press ahead with its intended rate hikes?
Market expectations: Markets predict a 56% chance that the BoJ will hike in April 2026, with a near-70% chance of 2 rate hikes by end-2026.
1-3 hours after BoJ policy statement's release: press conference from BoJ Governor Kazuo Ueda.
USDJPY+ watch: USDJPY has already fallen (JPY strengthening vs US dollar) about 0.5% so far this week, towards the 156.50 downside target we cited on Monday, March 16th.
The yen's week-to-date gains lag its G10 peers, as JPY faces downward pressure from fundamental drivers including Japan's energy dependence and the petrodollar system.
POTENTIAL UPSIDE: USDJPY+ may rise to match its June 2024 peak around 161.90 if (1) market fears keep escalating surrounding the Middle East conflict, (2) BoJ hesitates to say it'll raise interest rates in this economic environment (3) Fed keeps backing away from rate cuts amid risks of an inflation shock
POTENTIAL DOWNSIDE: USDJPY+ may fall to 156.5 if (1) market fears subside surrounding the Middle East conflict, (2) BoJ cites willingness to rae Japan rates to tamper inflation shock (3) Fed believes Middle East conflict is temporary, Fed still ready to cut US rates later in 2026
Thursday @ 12:00PM UTC: BoE rate decision released
Key question: Will UK rate cuts be cancelled, or just delayed?
The BoE faces a challenging backdrop: a weakening labor market suggests cuts are needed, while inflation risks from rising energy costs argue for staying put.
Market expectations: about a one-in-3 chance (36%) for a UK rate hike by end-2026.
No press conference scheduled for BOE Governor Andrew Bailey
GBPUSD+ watch: The pound has advanced 0.9% against the US dollar so far this week, though is being resisted around its 14-day simple moving average (SMA).
Still, this FX pair nicknamed "cable" is moving closer to the 1.3430 upside target cited on Monday, March 13th.
POTENTIAL UPSIDE: GBPUSD+ may rise to 1.343 if (1) market fears subside surrounding the Middle East conflict, (2) BoE cites readiness to raise interest rates and (3) Fed believes it can cut US rates later in 2026
POTENTIAL DOWNSIDE: GBPUSD+ may fall to 1.305 if (1) market fears keep escalating surrounding the Middle East conflict, (2) BoE says it'll be tough to raise interest rates in this economic environment (3) Fed keeps backing away from rate cuts
Thursday @ 1:15PM UTC: ECB releases policy decision
Key question: How much will soaring energy prices reshape the ECB's next steps?
The ECB faces a delicate balancing act as surging energy costs threaten to reignite inflation across the eurozone.
Market expectations: Markets now predict a 44% chance that the ECB will hike rates TWICE by end-2026, with the first hike expected (65% chance) in June 2026.
@ 1:45 PM UTC: press conference by ECB President Christine Lagarde
EURUSD+ watch: The euro has strengthened nearly 1% against the US dollar so far this week, moving closer to the 1.1590 upside target cited since Monday, March 13th (also around where its 14-day SMA currently resides)
POTENTIAL UPSIDE: EURUSD+ may rise to 1.1590 if (1) market fears subside surrounding the Middle East conflict, (2) ECB cites readiness to raise interest rates and (3) Fed doesn't see Middle East conflict preventing it from cutting US rates later in 2026
POTENTIAL DOWNSIDE: EURUSD+ may fall to 1.1260 if (1) market fears keep escalating surrounding the Middle East conflict, (2) ECB says it'll be tough to raise rates (3) Fed keeps backing away from rate cuts