Dollar edges higher as traders brace for Fed decision; RBA, BoC, SNB also in focus amid delayed US data
FX markets enter the week on a knife edge with four major central bank decisions and key US data delays likely to stoke volatility. The Federal Reserve headlines the calendar on Wednesday at 2:00 p.m. ET, followed by Chair Jerome Powell at 2:30 p.m., while the RBA, BoC and SNB are each expected to hold rates steady.
Fed takes the spotlight as guidance trumps action
Powell’s tone and the FOMC statement will matter more than the policy move, with traders parsing any tweaks to growth and inflation language and the Summary of Economic Projections for hints on the path of cuts in 2025. With notable US releases such as CPI and the monthly employment report delayed until after the FOMC, the Fed is flying partially blind — a setup that could amplify dollar and Treasury volatility if the guidance leans more hawkish than markets expect.
Yields at the front end remain highly sensitive to marginal shifts in rate-path signals, and positioning into the event suggests two-way risk for the dollar. A firmer hold-elevated narrative could underpin the greenback and pressure risk-sensitive FX, while any perceived pivot toward earlier easing would likely support equities and cyclicals, weighing on USD.
Global central banks: holds expected, guidance key
– Reserve Bank of Australia: Decision due Monday night US time (10:30 p.m. ET). Consensus expects no change at 3.60%. Traders will watch the statement and press conference for how policymakers balance sticky services inflation against a cooling domestic backdrop. AUD sensitivity may be higher into Thursday’s labor data.
– Bank of Canada: Policy announcement Wednesday (9:45 a.m. ET). After back-to-back firm jobs prints, a hold is widely expected with the policy rate currently at 2.25%. CAD moves may hinge on growth guidance and any acknowledgment of persistent wage pressures.
– Swiss National Bank: Thursday morning (Europe). The SNB is expected to keep the policy rate at 0.00%. Markets will focus on FX language and inflation projections after a period of subdued domestic price pressures but ongoing concern about imported inflation via a softer franc.
BOJ Governor Ueda is also scheduled to speak on Tuesday, a potential headline risk for yen pairs given the sensitivity of JPY to any incremental hints on policy normalization.
Key data delayed, liquidity risk elevated
The US jobs report, typically released this week, has been pushed to December 16. CPI is also due after the FOMC. With the Fed decision arriving ahead of those prints, guidance risk increases — and so does the potential for outsized moves in USD and rates as traders recalibrate once the data finally lands.
Week ahead: what traders are watching
Key points
- Wednesday 2:00 p.m. ET: Fed policy decision, statement and projections; 2:30 p.m. ET: Powell press conference.
- RBA Monday 10:30 p.m. ET: Hold expected at 3.60%, with statement and presser to set AUD tone.
- BoC Wednesday 9:45 a.m. ET: Hold expected; watch labor and growth guidance for USD/CAD direction.
- SNB Thursday (Europe): Hold at 0.00% expected; FX language in focus for CHF crosses.
- US data delays: Nonfarm payrolls now due December 16; CPI also after the FOMC, heightening guidance risk.
- Other releases: US JOLTS and ADP, Employment Cost Index, weekly jobless claims; Australia employment; UK monthly GDP.
Event calendar (ET)
- Monday — 10:30 p.m. AUD: RBA cash rate decision and statement; 11:30 p.m. AUD: RBA press conference.
- Tuesday — 4:00 a.m. JPY: BOJ Gov. Ueda speaks; US labor indicators including ADP and JOLTS through the session.
- Wednesday — 8:30 a.m. USD: Employment Cost Index; 9:45 a.m. CAD: BoC rate statement; policy rate announcement and press conference follow; 2:00 p.m. USD: FOMC decision, statement, projections; 2:30 p.m. USD: Powell press conference; 7:30 p.m. AUD: Employment change and unemployment rate.
- Thursday — Early Europe: CHF: SNB policy decision, assessment and press conference; 8:30 a.m. USD: Weekly jobless claims.
- Friday — 2:00 a.m. GBP: Monthly GDP.
Market implications
– USD: Skews hinge on Fed communication in the absence of fresh CPI/NFP. A hawkish hold could lift DXY and weigh on high beta FX; a dovish inflection would favor risk and pressure the dollar.
– Rates: Front-end yields are most exposed to changes in the dots and inflation rhetoric. Expect liquidity pockets around the announcement and presser.
– AUD: Sensitive to RBA tone and Thursday’s labor prints; AUD/USD implied vols may stay elevated through midweek.
– CAD: BoC’s growth and wage commentary will steer USD/CAD alongside oil sentiment.
– CHF: SNB FX language and inflation projections could swing EUR/CHF and USD/CHF; liquidity can be thin around the early-European release.
– Equities/Commodities: Risk appetite tied to Fed guidance; a softer USD would typically support commodities, while a firmer USD may weigh on metals and EM FX.
This article was produced by BPayNews.
FAQ
When is the Fed decision and Powell’s press conference?
The Fed announces its policy decision at 2:00 p.m. ET on Wednesday, followed by Chair Jerome Powell at 2:30 p.m. ET.
Why could volatility be higher this week?
Several major central bank meetings coincide with delays to key US data (CPI and the monthly jobs report). With the Fed guiding policy ahead of those releases, traders face elevated event risk and thinner liquidity pockets around announcements.
What are markets expecting from the RBA, BoC and SNB?
Consensus points to no change from all three. The RBA is seen holding at 3.60%, the BoC at 2.25%, and the SNB at 0.00%. Guidance and forward-looking language will likely drive AUD, CAD and CHF moves more than the decisions themselves.
Which FX pairs are most sensitive to the Fed?
Broad USD crosses including EUR/USD, USD/JPY and GBP/USD typically react first. High-beta pairs such as AUD/USD and emerging-market FX can see outsized moves if risk sentiment shifts.
How do the US data delays affect trading strategy?
Without fresh CPI/NFP, the Fed’s message carries greater weight. Many traders may reduce risk into the decision and re-engage once post-Fed price discovery settles or after the delayed data is released.
What should commodities and equities traders watch?
A hawkish Fed tone tends to support the USD and weigh on metals and risk assets; a more dovish lean usually does the opposite. Keep an eye on front-end yields and the dollar index for cross-asset cues.
