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Currency Market Analysis

Sep 19, 2019 | Currency Market Analysis

Global Themes

US dollar stronger after Fed’s “upbeat’ cut

The US dollar was stronger across the board overnight after the US Federal Reserve cut official interest rates but remained broadly upbeat on the US economy.

The Fed stayed positive by upgrading its 2019 economic growth forecast to 2.2% (from 2.1%) and indicating that it doesn’t expect to cut rates again.

The Fed forecasts indicate US rates will remain on hold until 2021. These forecasts, of course, are subject to change, with the Fed continuing to signal that it is “data dependant”.

Greenback climbs

The Fed’s apparent reluctance to cut again saw the US dollar climb.

The stronger US dollar saw the euro and Japanese yen both weaken.

BoJ due

The Bank of Japan is due around 12.00pm today with market expectations that the BoJ will maintain current policy setting.

However, after the ECB and Fed both cut rates over the last week, there remains a chance of the BoJ easing policy.

In other markets, the Australian employment market with the August jobs figures due at 9.30am.

The market expects 10k new jobs to be created with the unemployment rate expected to rise to 5.3%.

The Swiss National Bank and Bank of England also meet.

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