On Wednesday, September 18, the US Dollar Index managed to reverse three consecutive daily losses thanks to a bounce in US yields and positive data releases. This helped alleviate concerns about a significant slowdown in the US economy before the Fed’s interest rate decision. The main event of the week is the FOMC meeting on September 18, along with other key data releases such as Mortgage Applications, Building Permits, Housing Starts, and Net TIC Flows.
The Greenback’s resurgence put pressure on EUR/USD, keeping price action subdued in the low-1.1100s ahead of the FOMC meeting. In the euro zone, the final Inflation Rate and Construction Output data will be released on September 18, along with speeches from ECB officials Buch and McCaul. Similarly, GBP/USD traded defensively and retreated from earlier peaks near 1.3230 in response to the strengthening US Dollar. The UK Inflation Rate data is also scheduled for release on September 18.
USD/JPY rose to three-day highs, reaching the 142.00 neighborhood due to gains in the Greenback and higher US yields. The Balance of Trade results and Machinery Orders data will be unveiled on September 18. Meanwhile, AUD/USD traded around 0.6750, reaching multi-day highs despite the stronger US Dollar. The Westpac Leading Index will be published on September 18, followed by a speech from RBA’s Jones.
On the commodity front, WTI prices came under pressure near the $70.00 mark per barrel due to concerns about Chinese demand. Gold prices saw a slight pullback due to the firmer US Dollar and recovering US yields, while silver prices traded in a narrow range below the $31.00 mark per ounce.
Overall, the US Dollar managed to regain some ground on Wednesday ahead of the FOMC meeting, supported by positive US data releases and higher yields. Key data releases and speeches from central bank officials will provide further insight into the economic landscape. Meanwhile, commodity prices faced pressure from concerns about Chinese demand and the strength of the US Dollar. Traders will be closely watching the developments in the global markets in the coming days.
