Inflation is coursing through the global economy, and central bankers around the world are raising rates in a bid to stamp out these scorching consumer prices.

Market participants are growing increasingly fearful of the economic scenarios that lie ahead, ranging from stagflation to a recession, prompting selloffs across various asset classes, from bonds to stocks.

Today, the Bank of England raised interest rates by yet another 25 basis points (bps) to bring its benchmark rate up to 1%.

The BOE has now hiked at four consecutive policy meetings, starting from its December hike.

Yet, the Pound is falling, even though a rate hike typically translates into a stronger currency. 

After weeks and months of speculation and volatility, FX markets are primed to react to the US Federal Reserve’s policy clues this week.

The Fed is due to issue its keenly awaited policy statement at 18:00 GMT today with Fed Chair Jerome Powell due to hold a press conference just 30 minutes after.

Watch out for major central banks with pivotal decisions alongside these major data releases and economic events in the coming days:

Monday, 2 May

Shifting expectations for the next policy moves by major central banks remain a key theme across global financial markets, as investors and traders digest these major data releases and events in the week ahead:

Monday, April 25

• EUR: Euro to react to Sunday’s French presidential election results
• EUR: Germany April IFO business climate

Tuesday, April 26

Two words: policy divergence (read on to find out more).

But first, let's take a look at just how dismal the Yen's performance has been so far in 2022.

The Japanese Yen is now trading around a 20-year low against the US dollar.

Last Tuesday, USDJPY posted its biggest single-day climb since November 2020, only to then take a breather for the time being.

^{(Note: weaker Yen versus the US dollar = USDJPY climbs higher).}

Currency markets exploded to life this week as global growth concerns, inflation worries, and geopolitical tensions rocked global risk sentiment.

The mighty dollar jumped to a fresh two-year high yesterday only to tumble like a house of cards this morning.

Stocks in Asia traded cautiously on Tuesday, following a negative close on Wall Street overnight as growth concerns, inflation worries and geopolitical tensions hit risk sentiment. European markets opened lower this morning due to the deepening crisis in Ukraine, with the caution likely to find its way back to US markets this afternoon. In the currency space, the mighty dollar rose to a fresh two-year high during early trade, supported by rising treasury yields and Fed hike bets.