Weekly Market Insights with Gary Thomson: Fed and BoJ Interest Rate Decisions and UK Inflation

[FXOpen]

Three events could shape currency markets this week, with UK inflation and two key central bank decisions scheduled within just two days.

In this video, Gary Thomson looks at the latest UK inflation data, the Federal Reserve’s unusually uncertain rate decision and the Bank of Japan’s expected policy tightening — and what they could mean for GBP, USD and JPY.

Key topics covered:

UK Inflation — 16 September — With inflation risks building again ahead of the Bank of England’s September meeting and the UK government’s October Budget, could stronger price growth increase expectations for another BoE rate hike later this year and support the British pound?

Fed Interest Rate Decision — 16 September — Markets are pricing in around a 62% probability of a 25-basis-point hike. With a September hike far from fully priced in, the decision itself could trigger a notable market reaction. Economic projections and the press conference may have an additional impact on the US dollar.

BoJ Interest Rate Decision — 18 September — Markets expect a 25-basis-point rate increase, with USD/JPY already falling to its lowest level since February 2026. Could signals about further quarterly hikes provide additional support for the Japanese yen?

With GBP, USD and JPY all sensitive to changing rate expectations, these three events could bring volatility to currency, commodity and equity markets.

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[Liam Walker]

Everyone's convinced the Fed is hiking and the yen is a sure bet right now, which honestly just makes me want to load up on USD and short the JPY out of pure spite. Markets never do what the 62% consensus expects anyway.

 

[Mason Brooks]

Man, the consensus trade is usually the one that leaves everyone holding the bag. I wouldn't touch that JPY pair with a ten-foot pole right now unless you've got your stops locked in tight. Everyone is trying to be a hero on the Fed call, but with that kind of volatility, you’re just begging to get stopped out in the first five minutes of the press conference. I’m staying flat until the dust settles, or at least until I see how the price action handles the initial spike. Don't blow your account trying to predict the news, it’s not worth the stress.

 

[Zakami Ng]

Spot on. Honestly, trading the news release itself is just asking for a bad fill and getting whipsawed before the real move even starts.

I'm keeping an eye on the 4-hour USD/JPY chart right now because we're sitting right on some heavy support, but the daily RSI is showing a pretty clear bullish divergence while the MACD is trying to put in a cross. If that divergence plays out, half these breakout shorts are going to get trapped instantly once the Fed statement drops. Still waiting for the dust to clear though.

 

[Owen Carter 27]

So true about waiting for the dust to settle. Honestly, watching these macro guys try to trade the initial headline spike is hilarious until you remember how fast slippage can eat your whole account. I'm just ignoring the noise and parked right in front of the daily chart, waiting to see if price actually respects that support zone or just slices right through it.