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Currency Market Analysis

Sep 17, 2020 | Currency Market Analysis

Global Themes

USD tumbles as Fed signals rates to stay low until 2023

The USD tumbled lower overnight after the Federal Reserve signalled US interest rates would stay near zero until at least 2023 but provides no additional detail on further policy moves.

The impact of the Fed’s decision to keep rates low could be significant, with low US interest rates historically boosting shares, commodities and the Australian dollar.

The Fed also updated forecasts to include its projections for 2023.

The US central bank said it expected unemployment to return to 4.0% and inflation to climb to 2.0%.

JPY jumps ahead of BoJ

The USDSGD fell 0.2% as it reached the lowest level since the Chinese New Year.

The other key move in equity markets was the higher Japanese yen.

The JPY climbed ahead of today’s bank of Japan meeting

Aussie jobs

The Australian employment numbers are key today with the potential for a weaker number as the impact of the Victorian lockdown hits business activity.

According to Reuters, the range of forecasts remains extremely wide, and indicates the difficulty in forecasting in current conditions. Forecasts range from a gain of 102k to a fall of 125k.

Apart from the Bank of Japan, the Bank of England also meets today.

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