Central Bank Speeches Ahead – US, UK, EU Monetary Policy in Focus

Forex traders have a full day ahead with three powerful central bank speeches by the heads of the ECB, BoE and Federal Reserve. The USD, GBP and EUR currency crosses may make moves on the signals coming from the central bank officials. 

Federal Reserve Chairman Jerome Powell is fighting inflationary pressures in the US and his speech may provide more clues as to whether he supports a 0.5 percent or 0.75 percent interest rate hike at the central bank’s May meeting. On the brighter side, GDP and jobs growth in the US are currently strong.  

Any further hawkish rhetoric may strengthen the safe-haven USD. The currency most recently surged against its counterparts amid the prospects of higher interest rates in the US.  

ECB President Christine Lagarde faces the possibility of slowing growth in the Eurozone combined with rising inflation amid the geopolitical events in Eastern Europe. The ECB had been widely expected to start monetary tightening in the third quarter, but economic and geopolitical events have caught up with the central bank, putting monetary policy makers in the difficult position of maintaining a dovish course against the headwinds.  

What confronts BoE Governor Bailey is every monetary policy maker’s nemesis – 30-year highs in the inflation rate. The inflation rate reached 7 percent in March on upward pressure from high crude oil spot prices, taking consumer prices well beyond the target inflation rate of 2 percent.  

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Stock market earnings reports 

Investors are set to hear more about the first quarter results for several large-cap listed companies. Nextera Energy Inc releases its Q1 report today, along with AT&T and Blackstone. 

This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.