High-Stakes Decisions: Octa Broker Looks at the BoC, Fed, BoJ, and ECB’s Future
This week is going to be very significant for the world’s financial markets in 2025. The Bank of Canada (BoC), U.S. Federal Reserve (Fed), Bank of Japan (BoJ), and European Central Bank (ECB) will all announce their latest monetary policy decisions within a tight 72-hour window on Wednesday and Thursday.
Traders and investors all over the world will carefully look at their statements, press conferences, and forward guidance. Even small changes in tone can have a large effect on currency values, bond yields, and commodity prices.
According to Octa broker, a broker that has been regulated around the world since 2011, this week’s events could make key currency pairs like USDCAD, EURUSD, USDJPY, and XAUUSD (gold) very volatile. It is significant to understand these policy changes because differences in interest rates are still one of the most significant factors affecting Forex trends.
Octa gives a short overview of what to expect from each central bank, how the market might react, and the technical levels that traders should keep an eye on.
Bank of Canada (BoC): A likely rate cut because demand is low
The Bank of Canada will make its policy decision on Wednesday, October 29, at 9:45 a.m. ET (1:45 p.m. UTC). It will then release its Monetary Policy Report (MPR).
The vast majority of people in the markets expect a 25-basis-point (bps) rate cut, which would be the second in a row. This would bring the overnight lending rate down to 2.25%. Refinitiv’s interest rate swap data shows that there is a 91% chance of this happening.
The fragile job market and sluggish domestic demand are what led to the decision. A recent survey of businesses by the Bank of Canada showed that order volumes were low and hiring plans were limited, which is a sign of a cooling economy. Even though ahead data suggests Canada may avoid another quarterly contraction, the risks are still high, especially now that U.S.-Canada trade talks have been put on hold.
Governor Tiff Macklem has said before that the central bank is ready to make things easier if the economy gets worse, and recent data backs that up.
But some economists aren’t so sure. In September, Canada’s inflation rate unexpectedly rose to 2.4%, while core inflation stayed above 3%. Some experts say that keeping rates steady could assist keep inflation credible and stop the value of the currency from falling too much.
Key Levels to Watch (USD/CAD): The market will move in the direction of the statement that goes along with the 25-bp cut.
If the message is dovish and suggests more easing, the Canadian dollar could fall, pushing USDCAD above 1.4050.
On the other hand, a hawkish hold or a cautious tone about inflation could push USDCAD back down to the 1.3950 support level.
The Federal Reserve (Fed): Everyone is Watching the Policy Split and QT
The Federal Open Market Committee (FOMC) will end its two-day meeting on Wednesday, October 29. The decision is expected at 2:00 p.m. ET (6:00 p.m. UTC), and Chair Jerome Powell will hold a press conference at 2:30 p.m. ET (6:30 p.m. UTC).
Markets are pricing in a 97% probability of a 25-bp cut, which would bring the federal funds rate down to a 3.75%–4.00% range—marking the Fed’s second rate reduction this year.
But the Fed is becoming more divided. Hawkish policymakers, like Jeffrey Schmid of the Kansas City Fed, say that inflation is still a difficulty, so we shouldn’t make things too simple. On the other hand, Governor Stephen Miran has called for a largeger 50-bp cut to assist the economy grow.
The ongoing U.S. government shutdown makes things even more hard because it has delayed the release of significant economic data, which means that policymakers have to rely on incomplete reports from the private sector. Recent job data shows that job growth averaged only 29,000 jobs per month from June to August, which is a clear sign of a sluggishdown.
At the identical time, inflation numbers have gone down, which gives the Fed more room to cut without causing prices to rise again.
The fate of the quantitative tightening (QT) program is another thing that people are interested in on the secondary market. The recent rise in overnight lending rates has led some people to think that the Fed might stop or pause QT sooner than expected to keep liquidity stable.
significant Levels to Keep an Eye On (XAUUSD):
A rate cut with dovish forward guidance and hints that QT will end would probably make the U.S. dollar fragileer, which would make gold (XAUUSD) go up.
A hawkish cut or cautious statement could keep the dollar from getting too fragile, which would keep gold in a consolidation zone.
Traders should look for support between 3,825 and 3,900 and resistance between 4,050 and 4,100.
The Wild Card of the Week: The Bank of Japan (BoJ)
On Thursday, October 30, between 02:45 and 04:00 UTC, the Bank of Japan will make its decision public.
The BoJ is likely to keep short-term rates at 0.5%, according to the markets, which give it an 82% chance. However, the outcome is still up in the air because of rising political and economic pressures.
Sanae Takaichi, Japan’s new Prime Minister, supports keeping interest rates low to encourage wage-driven inflation. She has also said she is ready for a new fiscal stimulus package. But the data on the economy at home tells a more complicated story.
Core inflation was 2.9% in September, the yen is still fragile, and inflation from imports is still a difficulty. At the last meeting of the BoJ, two board members disagreed and called for an immediate rate hike. If another member joins them this time, it will probably mean that a rate hike is coming in December.
significant Levels to Keep an Eye On (USD/JPY):
A dovish hold decision could send USDJPY above 153.90.
If there are any hawkish signals or a tighter vote split, the yen could get stronger, which would push the pair toward 151.00 support.
European Central Bank (ECB): Staying the identical Until December
On Thursday at 1:15 p.m. UTC, the European Central Bank will make its decision public.
Most people in the markets think that the ECB will keep rates at 2% for the third meeting in a row. Officials view this as a “temporary decision” until December, when new trade data and forecasts will give a better idea of where Europe’s economy is headed.
In September, headline inflation went up a little to 2.2%, but the central bank thinks it will drop back down to 1.7% in 2026, which is well within the target range. The eurozone economy is still fragile, but there are signs that it is stabilizing, especially later than Germany and France took steps to boost their economies.
But there is still a lot of uncertainty. The ECB’s next move could be affected by the ongoing political unrest in France, the debate over frozen Russian assets, and difficultys with global trade. Philip Lane, the Chief Economist, recently said that there are still risks to growth, but the outlook for inflation supports keeping policy tight for now.
significant Levels to Keep an Eye On (EUR/USD):
If the Fed sounds dovish, a steady hold with cautious optimism could push EURUSD up to the 1.1720 resistance level.
On the other hand, a dovish statement from the ECB could send the pair lower, testing support at 1.1570.
Octa Broker’s Outlook: Get Ready for More Volatility
Traders should get ready for large price swings and more volatility in global markets because four major central banks will make decisions in the next three days. Currency pairs that are linked to differences in interest rates, such as USDJPY, EURUSD, and USDCAD, could view large breakouts or reversals.
Gold could also do well if central banks all take a more dovish stance, which would mean that money will be easier to get in the future.
Octa analysts say that “traders should be ready for quick changes during the day and not take on too much debt.” This week isn’t about making a guess about one decision; it’s about managing the risk of reactions.
About Octa
Octa is a broker that is regulated around the world. Since 2011, it has offered commission-free trading services to clients in more than 180 countries, with more than 61 million trading accounts.
The broker offers free webinars, market analyses, and expert advice to assist traders make smart choices. Octa assists with a lot of humanitarian projects besides money, like building schools and improving community infrastructure.
Global Forex Awards named Octa “Most Reliable Broker Global 2024,” and Global Brand Magazine named it “Best Mobile Trading Platform 2024.” These are just two of the more than 100 awards it has won around the world.
This article is only for informational purposes and should not be taken as investment advice. There is a lot of risk involved in trading leveraged instruments like CFDs and forex, and you could lose all of your money. Before you trade, make sure you know all the risks.
