U.S. dollar and other currencies
The last week of January to see rate decisions by the US, New Zealand, South Africa, Mexico, Israel, Malaysia and ThailandReuters

After the European Central Bank announced a €1.1tr QE programme this week, global financial markets are waiting for yet another busy week with the FOMC rate decision in focus, while countries like New Zealand, South Africa, Mexico, Israel, Malaysia and Thailand also scheduled to set rates.

Bank Israel's announcement is due on Monday. The Fed, Reserve Bank of New Zealand (RBNZ), Bank Negara Malaysia (BNM), and Bank of Thailand (BoT) will announce policy rates on Wednesday, the South African Reserve Bank (SARB) and Banco de México, Mexico's central bank, are scheduled for Thursday.

In addition, the Bank of Japan will release minutes of its latest policy meeting and the ECB will publish the monthly report for December.

The US central bank is unlikely to alter rates of make any key changes in the policy in the 28 January review, but in the aftermath of surprises from Switzerland and Canada and the huge liquidity injection by the ECB, the Fed is expected to guide the markets with more inputs regarding the future rate path of the US.

After the last FOMC meeting, crude prices have extended the slide by another 25%, the dollar index has risen to a near 12-year high and the Swiss franc has rallied across the board. Also, minutes of the latest Bank of England MPC showed the only two members who had been demanding a hike in the main rate since August have changed their mind and supported the hold decision in the December review.

The Fed has to assess the global scenario in the background of those events while the emerging market countries have to look at rallying dollar and weakening global growth prospects among other issues while setting rates.

The evolving Eurozone scenario will be another common topic of discussion for central bankers globally. Reviews next week will also have the outcome of the Greek election on Sunday to consider as Greece is expected to see a regime change with the leading prime ministerial candidate is of the view that the current austerity practices in the country need to be cut back.

New Zealand

The RBNZ is not expected to make any changes to the policy this time, but with the country seeing decelerating price pressures and weakening growth prospects a rate cut could be considered.

Such a move will also be supported by the dovish surprises from elsewhere in G10 in the recent past. However, the sharp slide in the Kiwi dollar of late must be a consolation for the central bank as it will help exporters especially with falling commodity prices continuing to weigh on the economy.

New Zealand's official target rate is 3.5% after the four 25bps hikes last year. The last hike was in the July meeting and since then it has been kept steady citing easing inflation pressures and challenges to growth.

The Kiwi dollar had been holding a sideways track since September end, but the bis negative surprise in the inflation data on 20 January pushed it down through the 0.7607 support against the greenback. After the data, the NZD/USD has fallen more than 4.4% and hit its lowest since November 2011.

New Zealand's consumer price inflation was 0.8% in the fourth quarter of 2014, its lowest since the 2013 second quarter reading which was 0.7%. The Q3-2014 rate was 1% and the Q2 rate was 1.6%, indicating the deceleration.

Others

The current SARB rate is 5.75% and that of Mexico is 3%. South Africa had made two 25bps hikes last year while Mexico's was a cut of 25bps in 2014.

Malaysia's is 3.25% after the 25bps hike last year July. Thailand had made a 25bps cut in March last year and has kept steady since. Israel had cut the main rate by 75bps last year, taking it to 0.25%.

Inflation is on a downward trajectory in most economies including South Africa and Thailand, which had hiked rates last year.

Thai inflation rate has fallen sharply in December to as low as 0.6%, its lowest since late 2009, increasing speculation of a rate cut by the BoT.

"The Bank of Thailand has the opportunity to decrease the interest rate at its January monetary policy meeting. Core and headline inflation is running at the lower end of the BoT's target range," Moody's Analytics said in a report on Friday.