Central Banks Shake Markets as 2024 Ends: Bold Moves and Bullish Signals

Global central banks are taking diverse approaches to monetary policy as 2024 comes to a close. The Reserve Bank of Australia held rates steady, prioritizing inflation control and cost-of-living relief. Meanwhile, the Swiss National Bank surprised markets with an aggressive rate cut to weaken the franc and combat low inflation. The European Central Bank and Bank of Canada also continued easing, signaling efforts to stimulate growth amid economic uncertainty. In the forex market, technical analysis reveals bullish signals for the EURCHF pair, reflecting evolving market dynamics as traders navigate shifting monetary policies worldwide.

The Reserve Bank of Australia (RBA) held its cash rate steady at 4.35% in its final decision for 2024, marking the ninth consecutive pause. Despite inflation easing from its 2022 peak, it remains above target, with the RBA projecting a sustainable return to the midpoint by 2026.
Treasurer Jim Chalmers emphasized the government’s focus on easing cost-of-living pressures while balancing economic growth risks. Economists largely expected the hold, with many predicting the first rate cut in mid-2025. Borrowers are encouraged to refinance for potential savings ahead of any rate changes in the new year.

The Swiss National Bank (SNB) surprised markets with a larger-than-expected 50 basis-point interest rate cut, lowering its benchmark to 0.5% to curb gains in the Swiss franc and address low inflation risks. The move, the SNB’s biggest reduction in nearly a decade, weakens the franc’s appeal as a haven but leaves limited room for further conventional easing, with borrowing costs now close to zero.
SNB President Martin Schlegel emphasized the urgency of the decision to prevent overly restrictive monetary policy and noted that while negative interest rates remain an option, the likelihood of their return has decreased. Inflation forecasts have been further downgraded, with consumer price growth expected at just 0.3% in 2025.
The cut preceded a smaller expected rate reduction by the European Central Bank and highlights the SNB’s determination to tackle inflation undershooting while managing the franc’s strength in a challenging economic environment.

The European Central Bank (ECB) cut its deposit rate by 25 basis points to 3%, marking the third consecutive reduction as inflation nears 2% and economic growth weakens. The ECB dropped its commitment to maintaining restrictive policy, signaling a data-dependent approach for future decisions and hinting at further rate cuts through mid-2025.
New projections lowered growth and inflation outlooks for 2024, with concerns that sluggish growth could push inflation below target. While economists anticipate rates settling at 2%, debate persists on how far easing should go, especially given structural challenges like labor shortages and energy costs. President Christine Lagarde emphasized the ECB’s commitment to stabilizing inflation sustainably at its medium-term target.

The Bank of Canada delivered a “supersized” 50 basis-point rate cut, lowering the policy rate to 3.25% in an effort to stimulate economic growth as inflation stabilizes at 2%. This marks the fifth consecutive cut since June, with a total reduction of 1.75 percentage points in six months.
Governor Tiff Macklem signaled a more gradual approach to further cuts in 2025, citing mixed economic data and risks tied to housing market pressures and a weakening Canadian dollar. Macklem also highlighted uncertainties surrounding U.S.-Canada tariff disputes under President-elect Donald Trump, warning of potential economic disruptions if retaliatory measures are implemented.
While some economists caution against aggressive easing, Prime Minister Justin Trudeau supported the decision, calling it a positive step for lowering costs for Canadians.

Following its November 22 trough at 0.92032, the EURCHF pair has demonstrated a robust recovery, with key technical indicators signaling sustained bullish momentum. The initial bullish signal emerged from a Hammer candlestick pattern, highlighting buyer dominance and triggering an upward shift.
The outlook strengthened further as prices decisively broke above the 20-period and 50-period Exponential Moving Averages (EMAs), confirming improved sentiment. This positive momentum is reinforced by the Momentum Oscillator and Relative Strength Index (RSI), both surpassing critical levels of 100 and 50, respectively, validating the ongoing bullish trajectory.
Additionally, a close above the Upper Bollinger Band suggests the potential for continued upward movement in the near term. However, the 20-period EMA has yet to cross above the 50-period EMA, urging cautious optimism as traders monitor for further confirmation of a sustained trend. If favorable market conditions persist, the next potential price targets for EURCHF are 0.94863, 0.96296, and 0.97739. On the other hand, traders may consider the following potential support levels: 0.93429, 0.92543, and 0.92032.

As 2024 draws to a close, central banks are navigating a complex economic landscape, balancing inflation control with growth stimulation. While the RBA opts for stability, the SNB and Bank of Canada are making bold moves to address economic uncertainties. The ECB continues its easing path, signaling further cuts ahead. In the forex market, the EURCHF pair shows promising bullish momentum, offering traders opportunities amid shifting policies. With varying approaches to monetary policy, 2025 is poised to bring both challenges and opportunities for global markets.