💱 FOMC Passed with Limited USD Rebound; Focus Shifts to BOE Policy Decision
🏦 FOMC Outcome & Market Reaction
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The Federal Reserve delivered a 25bp rate cut, fully in line with expectations.
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The dot plot signaled two more cuts by year-end, matching market consensus.
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Chair Powell emphasized a balanced focus on employment and inflation, maintaining caution on price pressures.
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While the USD initially rebounded, the Dollar Index remains below its 10-day moving average, and the broader September USD downtrend is intact.
🇬🇧 Spotlight on the Bank of England
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The BOE’s Monetary Policy Committee decision is due today.
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Markets expect a hold, with a 7–2 vote split, as two members are likely to favor a rate cut.
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The UK economy continues to face low growth + high inflation (stagflation risks). CPI remains elevated at +3.8% YoY, while fiscal uncertainty ahead of the autumn budget adds pressure.
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With no new forecasts or Governor’s press conference scheduled, market stability may be short-lived.
🌍 Global Economic Events
Europe & EM:
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Eurozone Current Account (July)
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Eurozone Construction Output (July)
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Norges Bank expected to cut –25bp
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SARB expected to hold rates
United States:
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Weekly Jobless Claims (Sept 7–13)
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Philadelphia Fed Business Outlook (Sept)
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Leading Index (Aug)
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TIC Data (July)
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$19bn 10-year TIPS Auction
Key Speeches:
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ECB’s Lagarde, Nagel, and de Guindos
Oceania FX:
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NZD: Q2 GDP fell –0.9% QoQ (vs –0.3% expected) → fueling speculation of an RBNZ –50bp cut in October. NZD sold off sharply.
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AUD: August jobs data showed over 40k full-time job losses → softer outlook and renewed rate cut bets. AUD remains weak vs USD but strong against NZD, with AUD/NZD hitting 1.1244 in London trade.
📉 Dollar Index (DXY)
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Dipped to 96.58 in Tokyo, then rebounded to 96.84 in London.
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Still near multi-month lows but showing early signs of stabilization.
💹 Key FX Ranges (Near-Term Outlook)
| Pair | Support | Resistance | Comment |
|---|---|---|---|
| USD/JPY | 146.50 | 148.80 | Post-FOMC dollar weakness persists; 147 zone attracts selling. Intervention risk above 149–150. |
| EUR/USD | 1.1650 | 1.1800 | ECB on hold but euro remains resilient; dovish Fed could see 1.18 break. |
| GBP/USD | 1.3450 | 1.3620 | CPI stickiness provides support, but MPC vote split may drive volatility. |
| GBP/JPY | 198.00 | 200.50 | Gilt yields steer direction; tests above 200 attract cautious buying. |
| AUD/JPY | 96.00 | 98.00 | Weak jobs data → sell rallies; swings tied to US/Japan events. |
| NZD/JPY | 85.00 | 87.00 | GDP slump fuels RBNZ cut bets; sell-on-rally bias. |
| CAD/JPY | 105.50 | 108.50 | Driven by CPI & BoC decision; bias toward selling rallies. |
| XAU/USD | 3520 | 3620 | USD weakness + falling yields lift gold; buy dips near 3520–3550. |
📝 Additional Notes
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USD/JPY: 149–150 remains a key intervention risk zone, limiting upside.
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EUR/USD: Supported by ECB–Fed divergence; euro retains relative strength vs USD.
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GBP: Focus on MPC vote split; an increase in dovish votes could weigh heavily.
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Gold: Correlating with DXY weakness; 3520–3550 is key support for dip buyers.
✅ Summary:
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USD rebound post-FOMC is limited; broader dollar downtrend remains intact.
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GBP focus on BOE decision; volatility risk high depending on vote split.
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AUD & NZD weak on data, though AUD stronger relative to NZD.
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Gold supported by dollar softness + lower yields, near key breakout levels.
