Forex Weekly Focus: Central Banks

This will be a busy week in the currency trading market with a big round of economic releases coming out. Sitting center stage this week are the four, yes I said FOUR, central bank announcements coming up. First up is the Reserve Bank of Australia, the market had priced in a 75 basis point rate hike but Australia shocked the market with a full percentage point increase, that is 100 basis points. Up next is the Reserve Bank of New Zealand, Bank of England and the European Central Bank. The market has priced in a minimum 50 basis point change for the remaining Central Banks this week, with the only exception being the Reserve Bank of New Zealand. They are expected to cut rates by 1.5% taking away any hopes of a carry trade revival in the near term. Traders will need to keep adjusting their portfolios accordingly.
Later this week, we can also expect speeches from Fed Chairman Ben Bernanke and Treasury Secretary Paulson in addition to the the announcement of more cabinet positions by President Elect Obama. These statements will likely not signal any major changes but may present some opportunities for trading the major pairs. Traders can keep up with breaking market news at DailyFX as well as the Online Forex Trading News Blog.