How do you prepare for a central bank week?
Central bank weeks stack decisions, speeches and data into five intense days. Preparation decides whether you trade them well or just endure them.
Walk through your prep:
- what you do the weekend before
- how you set expectations for each decision
- the risk rules you tighten for the week
Background: how interest rate decisions move currencies.
Background: How interest rate decisions move currencies
Central bank decisions are the biggest scheduled events in forex. Why rates matter, why a hike can weaken a currency, and what to read beyond the decision.
Does a rate hike always strengthen a currency?
No. If the hike was fully expected, it is already in the price. The currency can even weaken if the central bank signals that it won't raise rates further.
What does hawkish mean?
Leaning towards higher interest rates to control inflation. A hawkish surprise usually supports the currency.
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