The US dollar declined against most currencies as traders waited for the Federal Open Market Committee (FOMC) interest rate decision that will come out at 18:00 GMT. The currency fell by 0.53% against the British pound, 0.25% against the euro, and 0.27% against the Japanese yen. Analysts believe that the bank will leave the interest rate and quantitative easing unchanged. They also expect the Fed chair to ask congress to pass another fiscal stimulus to help support the emerging economy. The dollar also fell after relatively weak retail sales numbers from the US. The data showed that the headline retail sales rose by 0.6% in August while the core retail sales rose by 0.7%.

The British pound rose today as traders continued to downplay the current Brexit issue. In reports by Danske Bank and ING, analysts continued to predict that the two sides are likely to reach an agreement by the end of the year. The pound also rose after the mixed inflation data. According to the Office of National Statistics (ONS), the headline consumer price index declined by -0.4% in August after rising by 0.4% in the previous month. That increase was in line with what analysts were expecting. The core CPI fell by -0.6% while PPI input fell by 0.4%. The pound is also rising as the Bank of England holds its monetary policy meeting.

The Japanese yen strengthened against the US dollar as traders reacted to the mixed trade data from Japan. According to the Ministry of Finance, the country’s exports declined by 14.8% in August. That was the 21st consecutive month that the country’s exports have increased. In the same month, the country’s imports declined by more than 20.8%, which was an improvement from the previous month’s decline of 22.3%. This led to the trade surplus rising from 10.9 billion yen to more than 248 billion yen. Traders also reacted to the confirmation of Yoshihide Suga as the country’s new prime minister.

EUR/USD

The EUR/USD pair rose to an intraday high of 1.1870 ahead of the FOMC decision. The price is slightly above the 50-day and 25-day exponential moving averages. It is also slightly below yesterday’s high of 1.1900. At the same time, its volatility, as measured by the Average True Range (ATR) has dropped to the lowest level since September 9. Low volatility tends to be a sign of the calm before a storm, which means that the price is likely to have a pullback or breakout after the FOMC decision.

EURUSD

USD/JPY

The USD/JPY declined to an intraday low of 105.05, which is its lowest level since 31 July. The pair also moved below the important support of 105.08. On the four-hour chart, the price has moved below the 50-day and 100-day exponential moving averages while the RSI has fallen to the lowest level since August 19. Therefore, the pair is likely to continue falling as bulls aim for the next support at 104.50.

USDJPY

GBP/USD

The GBP/USD pair rose to an intraday high of 1.2960, which is the highest level since September 10. The price is along the 50-day EMA. The RSI has moved from the oversold level of 16.40 to the current level of 61. The signal and main line of the MACD are also moving above the neutral level. Therefore, the pair is likely to continue rising ahead of the FOMC decision.

GBPUSD

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