Forex today: Dollar pulls back before Fed, gold holds losses, yen steadies
The dollar retreated ahead of the anticipated Fed decision, while gold extended its losses and the yen showed stability after recent volatility.
The dollar retreated ahead of the anticipated Fed decision, while gold held its losses near $4,000 and the yen showed stability after recent volatility.
Major currency movements
The dollar retreated from over one-month highs, according to Investing, as markets keenly await the Federal Reserve's key interest rate decision and subsequent FOMC Statement and Press Conference later today. BNY notes that discussions around "supercore" inflation metrics are guiding the Fed's path.
The Japanese yen showed stability despite a regional stock market crisis and is now awaiting Tokyo inflation data. This marks a shift from yesterday's significant plunge to a 40-year low. On an intraday basis, our strength gauge ranks the Swiss franc as the strongest currency.
The euro faces headwinds, with FXStreet reporting that cheaper energy, ironically, presents "the problem" for the currency. Meanwhile, the British pound awaits a forecast that FXStreet says "the tape has already outrun," indicating that market expectations are largely priced in.
Antipodeans and commodities
The Australian dollar is positioned ahead of crucial CPI data due out today, with forecasts anticipating annual inflation to reach 4.0% for June. Traders will monitor these figures for potential impact. On an intraday basis, the New Zealand dollar is ranked as the weakest major, with NZD/USD holding steady ahead of the upcoming Fed decision.
Gold is holding losses near $4,000, according to FXStreet, having given back the previous session's rally as the broader market focuses intently on the US central bank's announcement.
Market metrics
Our market readiness gauge (MRS) sits at 41, suggesting moderate readiness for significant market shifts. The carry trade score (CTS) is high at 79, while market sentiment (FSI) remains neutral at 55.
Key events today
- AUD · CPI y/y · Scheduled: forecast 4.0% vs previous 4.0%
- USD · Federal Funds Rate · Scheduled: forecast 3.75% vs previous 3.75%
- USD · FOMC Press Conference · Scheduled
