Central bank plays a major role in the markets. Interest rates are the most important event to Forex markets and any discussions that take place in the central bank’s announcements can cause huge volatility and drastic movements in the market within seconds. As mentioned from the previous post, the general rule is if the interest rates go up, the currency should strengthen, though it doesn’t always last for a long time because the market does what it does.
SOME IMPORTANT CENTRAL BANKS ANNOUNCEMENTS
1.UNITED STATES – Federal Open Market Committee (FOMC), I have already covered FOMC on the previous post but I will now post the actual dates when the meetings will take place, as mentioned they meet 8 times a year. Below are the dates of the meetings.
2.UK – BANK OF ENGLAND( BoE)
The BoE is made up of nine members and meets once a month to determine interest rates, it is usually on the first Wednesday or Thursday of the month, but the minutes from this particular meetings are released 2 weeks later, those minutes are the market movers, they actually show how many voted for the rate hike and how many voted for the rate cut. Those meetings also give an indication of future moves on specific currencies.
3. JAPAN- BANK OF JAPAN( BoJ)
Bank of Japan meets once a month for two days in the middle of the month to discuss the economy and to decide on interest rates. At the end of the meeting, they release their statement and that statement is used by the market to provide clues on future rates moves.
4.CANADA- BANK OF CANADA
Bank Of Canada(BoC) meets 8 times a year to determine monetary policy and interest rate levels. They have a set inflation band of between 1-3% and they set their interest rates in order to remain within this band. A statement is released at the end of the meeting and for Forex market, the statement is more important than the meeting itself and it is used by the market to provide future moves.
5. AUSTRALIA -RESERVE BANK OF AUSTRALIA (RBA)
The Reserve Bank of Australia has about 10 meetings a year to set interest rates levels, their inflation band target is between 2-3% and they also set their interest rates in order to remain within this band. At the end of the meeting, the statement is released and it is used to provide clues for future rate moves.
I have tried my best to break it down into segments for easy understanding. As much as some traders love their charts, it helps to pay attention to this meetings to avoid nasty surprises like a stunt pulled by the Swiss bank, many traders had no idea there was an announcement due on that date. I hope the economic news broken down in this manner will make it easier for you to research more on them, I am not giving out all the information concerning, but just highlighting some few to give you an idea of what to look for. Thank you for reading and if you find this post useful, please DO share with your social media pages or groups using the share buttons below.