Market Update for September 18th
Here’s a summary of the situation as we head into Thursday, September 18th:
The market seems to be caught in a mix of caution and optimism today, potentially altering the cautious stance of the US Federal Reserve. This shift might adjust the anticipated interest rate cuts from the Bank of England (BOE) expected later today.
The US Dollar (USD) is showing signs of recovery following recent Fed actions, with S&P 500 futures climbing about 0.30%. As of now, the USD index has risen to 97.50, marking a daily increase of 0.25%.
Today’s US Dollar Price
The following table outlines the fluctuations in the US dollar (USD) against various other currencies today. Interestingly, the dollar stands out as the strongest compared to the New Zealand dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.15% | 0.30% | 0.28% | 0.15% | 0.48% | 1.04% | 0.24% | |
| EUR | -0.15% | 0.02% | 0.14% | 0.01% | 0.31% | 0.98% | 0.11% | |
| GBP | -0.30% | -0.02% | 0.12% | -0.03% | 0.27% | 0.89% | 0.09% | |
| JPY | -0.28% | -0.14% | -0.12% | -0.14% | 0.12% | 0.72% | -0.02% | |
| CAD | -0.15% | -0.01% | 0.03% | 0.14% | 0.31% | 1.02% | 0.10% | |
| AUD | -0.48% | -0.31% | -0.27% | -0.12% | -0.31% | 0.70% | -0.20% | |
| NZD | -1.04% | -0.98% | -0.89% | -0.72% | -1.02% | -0.70% | -0.77% | |
| CHF | -0.24% | -0.11% | -0.09% | 0.02% | -0.10% | 0.20% | 0.77% |
This table illustrates the changes in major currencies, where the base currency is listed in the left column and the comparing currency is along the top. For instance, if you’re looking at USD versus JPY, the value in the intersecting box stands for that exchange rate.
Yesterday, the Greenback dropped to a three-and-a-half-year low at 96.22 against six major currencies after the Fed released its latest DOT plot chart, summarizing its economic forecasts.
In an unusual move for this year, the Fed has decided to lower its expected interest rate to 4%-4.25%, reducing it by 25 basis points (BPS).
However, shortly afterward, the USD reversed its course, rallying back as US Treasury bond yields rose.
Powell noted that “risk management measures have been eased due to the weakening labor market and the central bank’s case-by-case approach,” referencing Reuters.
Even with conservative cuts, the upcoming Fed meeting in October is reflecting an 87.7% market expectation for an additional 25 BPS reduction, according to data from CME Group’s FedWatch tool.
The market is particularly focused on the BOE’s policy announcement today. With UK inflation at its peak since early 2024 and wage growth slowing down, the market anticipates a careful approach in easing borrowing costs after maintaining the benchmark rate at 4%.
Regarding GBP/USD, it’s been pulling back from 1.3726 for over two months, now approaching the 1.3600 level as traders await potential risks from the BOE’s announcements.
EUR/USD is also correcting from its four-year high, trading around 1.1800, as the market anticipates comments from the European Central Bank (ECB) officials.
As for USD/CAD, it dipped just below 1.3800 as it digested the policy actions from the Fed and the Bank of Canada (BOC), which recently cut its key interest rate to 2.5%, marking its first reduction since March to support a struggling economy.
Meanwhile, for USD/JPY, traders are closely monitoring movements above the 147.50 level, working closely to assist the rebound.
On the other hand, NZD/USD is lagging behind, with New Zealand’s economy showing just a 0.9% growth in the last quarter.
Lastly, gold is expected to experience a pullback, potentially dropping below $3,650. Traders are also keeping an eye on new jobless claims data from the US for fresh market cues.
