The meetings of three major central banks were the center of attention this week as traders awaited new information about the direction of their respective monetary policies and their impact on the economy and on financial markets. The Federal Reserve’s meeting was more closely monitored due to its wider impact on global markets and as traders expected a pause in interest rate hikes.

While the Federal Reserve delivered on the pause, it revised its interest rates expectations higher which affected traders’ views to a certain extent and created some volatility. Nevertheless, sentiment remained positive in particular with stock markets resuming their gains. However, they could be exposed to some risks over the medium term as interest rates could rise during the remainder of the year.

Markets also reacted to the decision of the European Central Bank, which increased its interest rates and maintained a hawkish outlook regarding its future meetings. The Euro strengthened as a result against the yen which saw the Bank of Japan maintain its dovish policy. Traders’ attention could turn to the Bank of England meeting next week, which could potentially impact the British pound’s direction.