Currencies at risk with central banks meetings ahead

The forex market could be exposed to significant volatility for the remainder of the week as traders react to the decisions from major central banks. Traders’ expectations could be strongly affected after the meetings of the Federal Reserve, the European Central Bank, and the Bank of Japan which are expected today, tomorrow, and on Friday respectively.

Both the Federal Reserve and the European Central Bank are expected to raise interest rates while the Bank of Japan could keep its policy unchanged. Comments from the heads of the respective institutions could be the center of attention as traders try to determine the next steps in monetary policy.

The Federal Reserve could be at or near the end of its rate hikes cycle while its European counterpart could continue raising rates for longer. This could potentially support the euro against the dollar which could see some weakness against other major currencies as well.