Forex Today: What if the Fed…?

The greenback managed to recover some of its lost ground in recent days amid firmer results from the release of US data, which helped somewhat ease concerns about a significant slowdown in the US economy, all ahead of Wednesday’s Fed decision on interest rate.

Here’s what you need to know on Wednesday, September 18:

The US dollar index (DXY) reversed three straight daily retreats, helped by a decent rebound in US yields as investors continued to price in a 50 bps rate cut by the Fed on Wednesday. The key event of the week will be the FOMC meeting on September 18, supported by weekly mortgage applications from MBAs, building permits, housing starts and net ICT flows.

Renewed greenback buying pressure kept EUR/USD price action at the 1.1100s low ahead of the FOMC meeting. September 18 will see the final rate of inflation and construction output in the euro area, along with speeches by Buch and McCaul from the ECB.

GBP/USD traded on the defensive and retreated from previous highs near 1.3230 in response to the US dollar data pullback. The UK inflation rate will be published on 18 September.

USD/JPY rose to a three-day high and reviewed the 142.00 vicinity amid fresh greenback gains and higher US yields across the board. Trade balance results and machinery orders will be released on September 18.

AUD/USD alternated between gains and losses around 0.6750, hitting new multi-day highs despite the better tone of the US dollar. The Westpac Leading Index is expected on September 18, followed by Jones’ speech from the RBA.

WTI prices were under pressure near the $70.00 per barrel mark as concerns over Chinese demand returned to the fore.

Gold prices recently pared their strong advance on a firmer US dollar and a rebound in US yields. Silver prices extended Monday’s inconclusive price action, trading in a tight range below the $31.00 per ounce mark.