Policy divergence: which central banks are going their own way?

FTC Community TeamStaff17 Sept 202694 views

When central banks diverge — one hiking while another cuts — the currency pairs between them trend. Divergence is the mother of durable FX trends, and it's worth tracking deliberately.

Policy divergence: which central banks are going their own way? — central bank rate path diagram — A central bank's policy rate path across recent meetings

What are you seeing?

the divergence you're trading or watching
how long you expect it to last
the pair that expresses it best

Policy divergence: which central banks are going their own way? — trend versus range diagram — A trending market compared with a ranging one

Background: how interest rate decisions move currencies and inflation targets.

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