As we approach important central bank meetings and analyze the prospects for monetary policy, market volatility remains high. Analysts are focusing on whether interest rates will peak and if the ongoing historic tightening cycle is coming to a close.

The Bank of England is expected to raise rates by 0.25% in May, following recent economic data. However, there is much debate on whether this will be the peak or if further tightening will be necessary in the coming months due to conflicting signals from the underlying economy.

In the US, the central bank is expected to hike rates one last time this week before cutting rates later this year. This change in focus from inflation to recession is expected.

The European Central Bank is also likely to raise rates at this week's meeting, although analysts are divided on whether it will be a 0.25% or 0.50% move. Recent comments from officials indicate that the committee is becoming more divided.

On the exchanges, the US dollar remains weak due to concerns about the banking system and the US debt ceiling as the Fed reaches peak interest rates. GBP/USD is trading near its recent highs at the significant 1.2500 level, while GBP/EUR is trading near its monthly lows, reflecting a generally stronger Euro.