Your Guide to October Central Bank Week: Expectations and Market Implications

Key Points

• Starting on October 28, several major central banks will announce rate decisions in quick succession, with the Federal Reserve, European Central Bank, and Bank of Japan expected to hold while the Bank of Canada and Reserve Bank of New Zealand could tighten further.
• The Bank of Canada is one of the biggest wildcards, with expectations recently shifting from a hold toward a possible 25-basis-point hike.
• Then, in early November, the Bank of England is also expected to tighten—raising rates by 25 basis points to 4.00% on November 5.
• Any surprise decision—or shift in the expected policy path—could quickly reshape rate expectations and trigger sharp moves across the associated currency pairs.

After several major central banks raised rates in September, more rate hikes could follow in the days ahead, adding fresh catalysts for the global forex market.

The October decisions should offer a wide range of outcomes. Some central banks appear ready to pause, while others are weighing further tightening, increasing the potential for surprises.

The Federal Reserve, European Central Bank, and Bank of Japan are expected to hold rates steady, while the Bank of Canada and Reserve Bank of New Zealand could raise rates again. The Reserve Bank of Australia is also to hold in early November, before the Bank of England potentially follows with another potential rate increase on November 5.

For traders, the Bank of Canada, Reserve Bank of New Zealand, and Bank of England decisions look especially interesting. With rate hikes priced in across all three, any surprise—whether a hold, a larger move, or an unexpected shift in guidance—could quickly reset expectations and create opportunities in USD/CAD, NZD/USD, and GBP/USD.

Here’s how the calendar lines up:

• Federal Reserve (October 28)
• Bank of Canada (October 28)
• Reserve Bank of New Zealand (October 27–28)
• European Central Bank (October 29)
• Bank of Japan (October 29–30)
• Reserve Bank of Australia (November 2–3)
• Bank of England (November 5)

What Markets Expect From the October Meetings

Federal Reserve (October 28)

A hold at 3.75%–4.00% remains the clear base case for the Federal Reserve.

September inflation came in hotter than expected, while other recent data have shown that demand remains relatively resilient. Even so, markets continue to see another immediate hike as unlikely in October, with attention shifting toward whether the Fed tightens again in December.

That makes the guidance more important than the rate decision itself. A hold accompanied by stronger concern about inflation—or clearer signals that another hike is coming—could push Treasury yields and the dollar higher. A more patient message could push the next expected move further out and pressure the greenback.

Bank of Canada (October 28)

The Bank of Canada has become one of October’s most interesting calls.

Earlier in the month, a hold at 2.25% looked like the clear base case. But that expectation has changed in recent days. Firmer inflation, stronger retail data, and renewed concern about energy-driven price pressures have pushed expectations toward a possible 25-basis-point hike to 2.50%.

That makes this one of the more interesting decisions for traders. A hike accompanied by hawkish guidance could strengthen the Canadian dollar and push USD/CAD lower. A hold—especially after the recent shift toward tighter expectations—could trigger a sharp move in the opposite direction.

Reserve Bank of New Zealand (October 27–28)

Another 25-basis-point hike to 3.00% remains heavily favored for the Reserve Bank of New Zealand.

Inflation has eased but remains above the RBNZ’s target range, keeping additional tightening firmly in play. Because another hike is already largely priced in, however, the bigger question is what policymakers signal comes next.

A hike accompanied by continued concern about inflation could support NZD/USD. More cautious guidance could limit the response, while an unexpected hold would represent a significant policy surprise and could pressure the New Zealand dollar in the aftermath of the announcement.

European Central Bank (October 29)

The European Central Bank is expected to hold its deposit rate at 2.50% after raising rates in September.

Inflation remains above target, but weaker growth and tighter financial conditions give policymakers reason to wait before moving again. That shifts the focus toward whether another hike remains likely in December.

For EUR/USD, a hawkish hold could support the euro and push the pair higher. A more cautious message that delays expectations for the next hike could alternatively weigh on the euro.

Bank of Japan (October 29–30)

The Bank of Japan is also expected to hold in October after raising its policy rate to 1.25% in September.

That said, inflation remains elevated, and expectations continue to build for another rate hike before year-end. That makes any signal about a possible December hike especially relevant.

A more hawkish BOJ could support the yen and pressure USD/JPY. A cautious message—particularly if the Fed keeps another U.S. hike firmly in play—could widen the perceived policy gap again and send the pair higher.

Reserve Bank of Australia (November 2–3)

The Reserve Bank of Australia is expected to hold rates unchanged at 4.60% when it meets in early November.

Inflation remains elevated enough to keep another hike on the table, but softer labor-market data have seemingly reduced the urgency to tighten again in November. That leaves the RBA balancing persistent price pressures against signs that higher rates are beginning to weigh more heavily on the economy.

For the Australian dollar, the guidance is therefore more important than the decision itself. A hold accompanied by continued concern about inflation—and a clear willingness to raise rates again—could support AUD/USD. A softer outlook that places greater emphasis on weakening employment or growth could push future hike expectations further out and weigh on the pair.

Bank of England (November 5)

For the Bank of England, a 25-basis-point hike to 4.00% is now the favored outcome.

That marks a significant shift from September, when markets were leaning much more heavily toward no additional tightening this year. However, persistent inflation and stronger economic data have since pushed expectations in a more hawkish direction.

Because a hike is increasingly anticipated, the bigger question for sterling may be what comes next. A rate increase paired with continued concern about inflation could support GBP/USD, while a surprise hold—or guidance suggesting little appetite for further tightening in 2026—would likely put the pair under pressure.

How October’s Rate Decisions Could Affect Key Currency Pairs

With the above policy expectations in mind, here are the key trading levels to monitor across the major currency pairs.

EUR/USD trades near 1.1195, close to the bottom of its roughly 1.1160–1.1770 six-month range. A break below 1.1160 could put 1.1100 in play. On the upside, 1.1250 is the first hurdle, followed by 1.1300.

A more hawkish European Central Bank paired with a patient Federal Reserve could help the pair challenge those higher levels. A cautious ECB or firmer Fed outlook could instead put the lower end of the range back under pressure.

USD/CAD trades near 1.4012, in the upper half of its roughly 1.3580–1.4280 six-month range. The pair has fallen sharply over the past 10 days as expectations for a Bank of Canada rate hike have increased, bringing the psychologically important 1.4000 level directly into focus. A sustained break below it could extend the recent decline to 1.3940, while a rebound would put 1.4100 back in play.

A Bank of Canada hike accompanied by hawkish guidance could favor another leg lower. A surprise hold, however, could quickly reverse some of the recent move and send USD/CAD back toward 1.4100.

NZD/USD trades near 0.5683, toward the lower end of its roughly 0.5600–0.6000 six-month range. On the downside, 0.5660 is the first level to watch, followed by the 0.5600 area. On the upside, 0.5760 is the first big hurdle, with 0.5800 beyond it.

With another Reserve Bank of New Zealand hike already heavily anticipated, a move toward those higher levels may require guidance pointing to further tightening. A surprise hold or more cautious outlook could instead put 0.5660—and potentially 0.5600—back in play.

USD/JPY trades near 157.36 after falling from above 158.50 over the past several days. The six-month range is roughly 153.50–164.00, with 156.50 a key downside level to watch. Alternatively, a rebound in USD/JPY could bring 158.50 back into focus.

A hawkish Fed paired with a cautious Bank of Japan could revive the upside, while stronger signals of another Japanese rate hike could extend the recent decline. USD/JPY can move quickly once momentum builds, so a clean break in either direction could bring a wider range of levels into play.

AUD/USD trades near 0.7030, in the lower half of its fairly tight 0.6880–0.7250 six-month range. On the upside, 0.7100 is the main near-term hurdle. On the downside, 0.6980 is the first level to watch, followed by 0.6900.

A more hawkish Reserve Bank of Australia could help AUD/USD challenge 0.7100. On the other hand, a softer policy outlook could instead push the pair through 0.6980 and shift attention toward 0.6900.

GBP/USD trades near 1.3350, just below the midpoint of its roughly 1.3165–1.3650 six-month range. On the upside, 1.3400 and 1.3460 are key hurdles, followed by the psychologically important 1.3500 level. If momentum reverses, 1.3300 is a critical downside level to watch.

Expectations for a Bank of England hike could help sterling challenge those higher levels heading into November 5. If the expected increase does not materialize—or the outlook turns more dovish—1.3300 could quickly come back into focus. Below 1.3300, another key level to monitor is 1.3270.

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