Forecasting the upcoming week: Fed, BoE and BoJ headline a central bank triple-header
The US Dollar Index (DXY) closes the week near the 99.00 zone, little changed on the day and holding the ground it clawed back after a brief wobble on Thursday's US inflation release. The Greenback enters a defining week in a familiar spot, firmer in tone, but still unable to turn a hawkish rates story into a decisive breakout.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.14% | -0.10% | -0.48% | 0.26% | -0.21% | -0.22% | 0.46% | |
| EUR | -0.14% | -0.24% | -0.57% | 0.12% | -0.36% | -0.43% | 0.33% | |
| GBP | 0.10% | 0.24% | -0.35% | 0.37% | -0.13% | -0.17% | 0.58% | |
| JPY | 0.48% | 0.57% | 0.35% | 0.73% | 0.25% | 0.18% | 0.94% | |
| CAD | -0.26% | -0.12% | -0.37% | -0.73% | -0.48% | -0.55% | 0.21% | |
| AUD | 0.21% | 0.36% | 0.13% | -0.25% | 0.48% | -0.05% | 0.70% | |
| NZD | 0.22% | 0.43% | 0.17% | -0.18% | 0.55% | 0.05% | 0.76% | |
| CHF | -0.46% | -0.33% | -0.58% | -0.94% | -0.21% | -0.70% | -0.76% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Wednesday's Federal Reserve (Fed) decision anchors everything, and markets now lean toward a quarter-point hike that would lift the target range to 4.00% from 3.75%, following an August Consumer Price Index (CPI) report in which core prices ran hotter than forecast. With the move largely priced in, attention shifts to updated economic projections and Chair Kevin Warsh's press conference for signals on whether this is a one-off insurance hike or the start of something longer.
Canada opens proceedings with August inflation on Monday, alongside a batch of Chinese activity data. Tuesday brings the United Kingdom (UK) labor market report and Germany's ZEW sentiment survey. Wednesday is the pivot: UK CPI and a rebound-tipped US Retail Sales print land before the Fed decision, projections and press conference. The Bank of England (BoE) follows on Thursday, and the Bank of Japan (BoJ) closes the week on Friday.
The European Central Bank (ECB) is well-represented on the speaking circuit, with President Christine Lagarde due several times and colleagues Schnabel, Cipollone, Elderson and Lane also scheduled, though the Eurozone's own data is limited to final inflation confirmations, industrial production and the ZEW survey. Japan adds trade figures and national CPI, New Zealand reports second-quarter Gross Domestic Product (GDP), and the Reserve Bank of Australia's (RBA) Governor, Michele Bullock, speaks on Thursday. Overhanging it all is the unresolved situation around Iran and the Strait of Hormuz, which continues to set the tone for energy prices.
EUR/USD closes around 1.1590, softer on the day. The domestic calendar is thin, with final August inflation readings, industrial production, and the ZEW survey, so the pair stays largely a Dollar story into Wednesday's Fed decision. A hawkish hike would pressure it, but the Greenback's repeated failure to hold gains has kept a floor under the Euro.
GBP/USD trades near 1.3525, roughly flat on the day, and finally has a home calendar worth watching. Tuesday's jobs report, with the unemployment rate seen ticking up to 5.0%, precedes Wednesday's CPI, where core inflation is expected to firm to 2.7%. The Bank of England (BoE) decision on Thursday is expected to hold rates at 3.75%, though the market is looking for a sizeable minority around three members to vote for a hike. Sterling has its own catalysts, but the Fed still sets the bigger tone.
USD/JPY sits around 153.70, pressed lower as a soft Dollar met a firmer Yen. Friday's BoJ meeting is the domestic highlight, with markets leaning toward a hike to 1.25% that would take Japanese rates to their highest in decades. Thursday's national CPI feeds the debate. With the Fed and BoJ potentially tightening in the same week, the risk is skewed toward further Yen strength.
AUD/USD trades near 0.7170 and is the standout among the majors, holding firm into the weekend. The home calendar is light, with Bullock the main event on Thursday, so the Aussie leans on risk appetite, Monday's Chinese activity data and the Fed's guidance. A hawkish surprise is the clearest threat to its recent run.
West Texas Intermediate (WTI) Oil hovers near $100 after shedding more than 3% on the day, with no Oil-specific releases due. The story stays geopolitical: the standoff around Iran and the Strait of Hormuz keeps a floor under prices, and the International Energy Agency's warning of a widening supply deficit adds to the backdrop even as this week's pullback shows how quickly sentiment can turn.
Gold trades near $4,350, close to record highs after another firm session. With no catalyst of its own, the metal is keyed to the Fed: a hawkish hike and firm guidance from Warsh could finally spark a pullback, while any softness in the message would likely extend the run.
Author
Agustin Wazne
FXStreet
Agustin Wazne joined FXStreet as a Junior News Editor, focusing on Commodities and covering Majors.
