Forex Today: Dollar surrenders post-Fed gains, Aussie and Bitcoin tumble, BOE in focus

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Here is what you need to know on Thursday, September 19:

  • The US dollar is off its highs against major pairs as markets digest the Federal Reserve’s decision. The Fed cut rates by 25 basis points as expected and the dot-plot signaled no further cuts this year or the next. Chair Jerome Powell conveyed a balanced message of doing what is necessary according to data on “meeting by meeting” basis. Gold has also recovered and is trying to recapture $1,500.
  • The Bank of Japan left its interest rate unchanged at -0.10%  and did not introduce additional measures. The yen strengthened as the BOJ is not matching its peers with further stimulus.
  • The Bank of England is set to leave its policy unchanged with interest rates at +0.75%. While wage growth has accelerated, inflation has decelerated. Uncertainty about Brexit paralyzes policymaking. A unanimous voting pattern is on the cards. Speculation about a potential extension of Governor Mark Carney’s term will probably not be addressed in this decision.  UK retail sales are due out just before the decision.
  • The Swiss National Bank (SNB) is set to leave its Libor Rate at -0.75%. The Swiss franc has weakened in recent weeks after seeing safe-haven flows earlier. 
  • The Australian dollar has lost ground and dipped below 0.68 after the unemployment rate rose to 5.3%. However, the economy gained more jobs than expected and the participation rate has risen.
  • The New Zealand dollar has stabilized after second-quarter GDP beat expectations with 0.5% QoQ. Annual growth is slowing down. 
  • Oil prices have consolidated their losses with WTI Crude Oil trading around $58. Saudi Arabia sounded confident about restoring oil output following the weekend attack on its installations. US President Donald Trump has announced new sanctions on Iran, the alleged perpetrator of the attack, in a move that probably averts war.
  • The US economic calendar features the Philly Fed Manufacturing Index, Jobless Claims, and Existing Home Sales. These second-tier figures may impact currencies if they all go in the same direction.
  • Bitcoin fell below $10,000 and carried other cryptocurrencies lower. Ethereum and Ripple had previously gained ground.
     
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