⚠️Last Busy Session Of 2025 Ahead: Cable FX Macro
- Rosbel Durán
- 32 minutes ago
- 2 min read
We're running out of risk events for the rest of the year, and Thursday is set to be the last busy session of 2025.
European Central Bank (ECB) Monetary Policy Decision (followed by press conference): The latest meeting of the Governing Council of the European Central Bank has concluded, with market analysts and economists widely anticipating that interest rates will remain unchanged in light of recent economic data that has revealed stronger-than-expected activity within the Eurozone. This positive economic momentum has led to speculation about the ECB's future policy direction. Should the ECB convey any unexpected dovish signals during the press conference—such as hints at potential rate cuts in 2026—it could lead to a depreciation of the euro against other currencies, reflecting investor concerns about the central bank's commitment to maintaining a robust monetary policy. Conversely, should the ECB adopt a more hawkish tone, emphasizing the ongoing challenges posed by persistent inflation, particularly within the services sector, it could bolster the euro's strength. The delicate balance between these two potential outcomes will be closely monitored by traders and analysts alike, as it could have significant implications for currency markets and economic forecasts across the region.
Bank of England (BoE) Rate Decision: The consensus among economists and market participants appears to lean toward a modest reduction in interest rates, specifically a cut of 25 basis points. However, this outlook may be subject to change based on the forthcoming labor market statistics and the Consumer Price Index (CPI) data that were released earlier this week. These indicators are critical as they provide insights into the health of the UK economy and the potential inflationary pressures that may influence the BoE's decision-making process. A decision to hold rates steady, or a split decision among policymakers, could lead to increased volatility in the British pound (GBP) as traders react to the uncertainty surrounding the central bank's stance. Investors will be keenly observing how the BoE navigates these economic indicators and the implications for future monetary policy.
Bank of Japan (BoJ) Interest Rate Decision: The financial markets are currently pricing in a potential increase of 25 basis points in the Bank of Japan's interest rates, which would mark a significant shift away from the prolonged period of negative interest rates that has characterized Japan's monetary policy. This anticipated hike is largely driven by favorable trends in wage growth and inflation, which have led to a growing consensus that the BoJ may be ready to normalize its monetary policy in response to improving economic conditions. If the BoJ does proceed with this rate hike, it could lead to a substantial strengthening of the Japanese yen (JPY), as investors adjust their positions in anticipation of higher returns on yen-denominated assets. Such a move could also result in the unwinding of carry trades, where investors borrow in low-yielding currencies to invest in higher-yielding assets, potentially exerting downward pressure on global equities as capital flows shift. Conversely, if the BoJ opts to maintain the current interest rate levels, it could lead to disappointment among market participants and further weaken the yen, as the central bank's reluctance to adjust policy could be interpreted as a sign of ongoing economic challenges.
