Rate decisions coming from US, UK and Japan

Economic calendar summary

Four major central banks meet this week to decide interest rates. The US and Japan are expected to hold rates constant, while the UK and Switzerland are anticipating a 25 bps hike. Even if there are no surprises this week, guidance from bank leaders on rate forecasts through the end of the year have the possibility to move markets as traders speculate when interest rate hikes will end in countries like the US and UK.

Check out the entire economic calendar

Inflation Rate - Canada

Time: 8:30am ET Tuesday, September 19th

Previous: 3.3%

Expected: 3.8%

Inflation in Canada is expected to rise for the second month in a row off of June's low of 2.8%. USD/CAD is down over 100 pips in the past week - a strong inflation report could further CAD momentum while a soft reading may cause the pair to reverse higher.

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Interest Rate Decision - US

Time: 2:00pm ET Wednesday, September 20th

Previous: 5.5%

Expected: 5.5%

Markets are confident the Fed will not raise interest rates at this Wednesday's FOMC meeting. However, there is a 41% chance rates will increase by the end of the year according to CME. Clarifying language from Fed Chair Powell could shift this likelihood and US dollar pairs.

Interest Rate Decision - Switzerland

Time: 3:30am ET Thursday, September 21st

Previous: 1.75%

Expected: 2.0%

The Swiss National Bank is expected to raise interest rates by 25 basis points which would be their sixth consecutive rate hike. USD/CHF is currently trading at a two-month high near 0.9000.

Interest Rate Decision - UK

Time: 7:00am ET Thursday, September 21st

Previous: 5.25%

Expected: 5.5%

Contingent on the FOMC's decision, the interest rate differential between the US and UK will likely be either 25bps, 50bps or 0bps. An unexpected hold from the BoE would likely cause weakness in GBP while a BoE raise and a FOMC hold may send GBP higher. If both banks raise rates, USD may benefit more since a BoE raise is expected.

Interest Rate Decision - Japan

Time: 7:30pm ET Thursday, September 21st

Previous: -0.1%

Expected: -0.1%

Given the BoJ's history of aversion towards interest rate intervention, the conclusions of this week's meeting may be nuanced. If the BoJ takes any action toward tightening monetary policy, USD/JPY could move off its year-to-date highs. More of the same from the BoJ would leave the yen vulnerable to multi-year lows.

How to trade economic events

1. Open an account to get started, or practice on a demo account

2. Choose your forex trading platform

3. Open, monitor, and close positions on forex pairs

Trading economic events with forex requires an account with a forex provider like IG. Many traders watch major forex pairs like EUR/USD and USD/JPY for potential opportunities based on economic events such as inflation releases or interest rate decisions. Economic events can produce more volatility for forex pairs, which can mean greater potential profits and losses as risks can increase at these times.

ou can help develop your forex trading strategies using resources like IG’s Trading Academy. Once your strategy is developed, you can follow the above steps to opening an account and getting started trading forex.

Your profit or loss is calculated according to your full position size. Leverage will magnify both your profits and losses. It’s important to manage your risks carefully as losses can exceed your deposit. Ensure you understand the risks and benefits associated with trading leveraged products before you start trading with them. Trade using money you’re comfortable losing.