Key Updates for September 17th
Here’s the latest for today: There’s quite a bit of market buzz as global indices react ahead of significant announcements from major central banks, particularly the eagerly anticipated US Federal Reserve policy decisions.
We’re seeing signs of a softening labor market in the US alongside persistent inflation, which has resulted in increasing speculation regarding the Fed’s approach for aggressive easing this year. The decision expected later today is largely anticipated to include a 25 basis points cut.
This ongoing uncertainty surrounding Fed policies seems to have contributed to the US dollar hitting a two-month low against six other major currencies. Earlier today, the USD index was slightly up, close to 96.70, in the lead-up to the Fed’s announcements.
This Week’s US Dollar Performance
The table below outlines how the US dollar (USD) has shifted against various currencies this week; notably, the dollar is weakest against the Swiss franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -1.00% | -0.63% | -0.79% | -0.59% | -0.49% | -0.37% | -1.16% | |
| EUR | 1.00% | 0.41% | 0.16% | 0.41% | 0.56% | 0.60% | -0.16% | |
| GBP | 0.63% | -0.41% | -0.18% | 0.00% | 0.15% | 0.19% | -0.68% | |
| JPY | 0.79% | -0.16% | 0.18% | 0.16% | 0.34% | 0.41% | -0.37% | |
| CAD | 0.59% | -0.41% | -0.00% | -0.16% | 0.21% | 0.18% | -0.68% | |
| AUD | 0.49% | -0.56% | -0.15% | -0.34% | -0.21% | 0.04% | -0.71% | |
| NZD | 0.37% | -0.60% | -0.19% | -0.41% | -0.18% | -0.04% | -0.86% | |
| CHF | 1.16% | 0.16% | 0.68% | 0.37% | 0.68% | 0.71% | 0.86% |
The accompanying heatmap illustrates the fluctuations between major currencies, depending on their pairing.
On Tuesday, data from the U.S. Census Bureau indicated that retail sales climbed by 0.6% to reach $732 billion in August, surpassing market expectations of 0.2%, following a previous increase of the same magnitude in July.
Year-over-year, retail sales marked a 5% increase during this period. However, this news didn’t seem to impact market predictions regarding the Fed’s decision today. Current probabilities suggest a 67.9% likelihood of a reduction by year’s end.
Traders are keenly awaiting a press conference with Chairman Jerome Powell concerning interest rates, economic forecasts, and possibly some insights into future rate cuts from the central bank.
GBP/USD Following the Consumer Price Index (CPI) data for the UK from August, it looks like the pair is correcting from a two-month high of 1.3672, trading around 1.3650 at the time of this writing.
The UK’s National Statistics Office reported a 3.8% year-over-year increase in CPI last month, which is the highest since January 2024, though it slightly missed the market expectation of 3.9% growth.
EUR/USD is navigating through a fluctuating environment as the US dollar makes gains. The pair had reached a four-year peak of 1.1879 on Tuesday but faced resistance early in European trading. European Central Bank President Christine Lagarde is scheduled to speak during this session before the Fed’s announcements.
USD/CAD is trying to recover from a two-day drop and aims to break back up to around 1.3750. Investors are positioning themselves ahead of upcoming policy decisions from both the Bank of Canada and the Federal Reserve. Just before the US session on Tuesday, Statistics Canada revealed CPI data showing an uptick from 1.7% in July to 1.9% year-over-year; market expectations were around 2%.
USD/JPY showed volatility in early Asian trading, initially dropping to 146.21 before bouncing back to 146.60. The pair is benefitting from renewed weakness in the Japanese yen, which has seen exports decline for the fourth consecutive month, impacting JPY performance alongside the US dollar’s movement.
Gold traders appear to be cashing in on long positions, pausing amidst record highs around $3,700 as the market braces for volatility following the Fed meeting. Early sessions saw XAU/USD trading with a slight loss at approximately $3,680.
