Forex Today: Gearing up for central banks’ week
|What you need to take care of on Tuesday, September 20:
The week started in slow motion amid a scarce macroeconomic calendar, a holiday in the UK, and multiple central banks’ announcements scheduled for later in the week.
The dollar appreciated throughout the first half of the day but gave up in the American session, ending the day with modest losses against most of its major rivals. The currency moved alongside the markets’ sentiment, the latter set by equities. Asian and European indexes closed in the red, but Wall Street shrugged off the negative tone and trimmed most of its early losses.
Financial markets will likely remain in wait-and-see ahead of central banks’ decisions. This week, over fifteen institutions are set to decide between Wednesday and Thursday, including the US Federal Reserve, the Bank of England, the Bank of Japan, and the Switzerland National Bank. Massive quantitative tightening will be announced in the upcoming days, regardless of the potential effects on economic growth.
Meanwhile, Russia and China agreed to extend their cooperation on defense, focusing on joint exercises and weighing on the market’s mood.
Asian and European indexes closed in the red on Monday, but Wall Street trimmed most of its losses, with major indexes ending the day mixed. US Treasury yields maintained the upward pressure, with the near-term bonds yielding the most.
The EUR/USD pair trades around 1.0020, while GBP/USD hovers around 1.1430. The AUD/USD pair currently trades at 0.6725, while USD/CAD is down to 1.3255. Finally, the USD/JPY pair remained stable and changes hands at 143.20.
Commodities fell at the beginning of the day but finished it flat, with gold trading at $1,674 a troy ounce and WTI at $84.90 a barrel at the end of the American session.
Early on Tuesday, the focus will be on the RBA Meeting Minutes. Market players will be looking for clues on future rate hikes.
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