Trading Forex Around Interest Rate Decisions: Mastering Monetary Policy Impact Central banks drive forex. Their interest rate decisions, tone, and guidance change currency flows fast. In 2025, every Fed, ECB, BOJ, or RBA statement moves markets — not just because of the rate, but the forward guidance. If the Fed pauses hikes but signals future cuts, USD may fall even if the rate stays at 5.25%. Smart traders don’t just trade the rate — they prep bias days ahead, map potential outcomes, and wait for post-news reaction zones like order blocks or FVGs. High-impact meetings often create volatility traps: fake spikes, liquidity sweeps, then real direction. Mark previous decision highs/lows. Expect manipulation. Read dot plots, press conference tones, and inflation language. Interest rates aren’t just macro—they’re the engine of trend. If you trade without knowing what a central bank is signaling, you’re guessing. With the right prep, these events are goldmines — if you’re patient, not impulsive.