Forex Today: Dollar drops with yields in Fed’s aftermath, Evergrande risks loom, BOE to hint at taper?

Dhwani Mehta FXStreet

Here is what you need to know on Thursday, September 23:

The risk tone appears calmer in early European trading, as investors assess the Fed’s tapering announcement and China Evergrande’s Group’s looming debt crisis.

A sense of caution prevails, as the risk-on market mood eases slightly on concerns over Evergrande’s impending USD83 million debt repayment this Thursday, despite the People’s Bank of China (PBOC) pumping in USD17 billion into the system. Markets still remain hopeful, as the indebted property developer still has a 30-day grace period before it is registered as a default.

Investors appear to have shrugged off the progress on the US $3.5 trillion spending plan after the meetings between President Joe Biden and the Democratic lawmakers.

The Asian equities are a mixed bag, with full markets returning to the Evergrande crisis. China and Hong Kong stocks pare early gains while the S&P 500 futures also trim the advance. Meanwhile, the US dollar reverses hawkish Fed-led gains, falling in tandem with the Treasury yields amid the cautious mood.

Gold price is attempting a minor recovery of around $1765 in the Fed’s aftermath. WTI is trading modestly flat at mid-$72s, preserving Wednesday’s rebound.

Within the G10 currency basket, the Antipodeans remain the laggards, with AUD/USD keeping its range below 0.7250. The kiwi recovers from lower levels to trade around 0.7000, as the RBNZ said it would proceed with its proposal to tighten mortgage lending in a bid to control an inflated housing market.

USD/JPY’s upside remains capped below 110.00 amid a pullback in the yields. EUR/USD is bouncing back above 1.1700 amid recent encouraging comments on inflation by the ECB policymakers, as attention shifts towards the Euro area and the US Preliminary Manufacturing and Services PMIs.

GBP/USD is staging a solid comeback towards 1.3650, as traders remain hopeful that the BOE may hint at tapering at its September monetary policy meeting. Rising UK inflation expectations could prompt the British central bank to begin the policy normalization, with the odds increasing after the Fed’s hawkish surprise.

Cryptocurrencies are looking to stabilize, with Bitcoin back around $44,000.

Robinhood to launch crypto wallets for Bitcoin, Ethereum, and Dogecoin by October

Like this article? Help us with some feedback by answering this survey:

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

AUD/USD consolidates gains above 0.700; focus on CPI data

AUD/USD has regained composure on Tuesday, reversing the previous day’s pullback and further extending its move past the key 0.7000 yardstick. The pair’s recovery has come despite another solid day for the Greenback ahead of the FOMC gathering. Moving forward, the release of inflation figures will be the main focus in Oz on Wednesday.

USD/JPY sticks to modest gains above 157.50 as traders await Fed, BoJ meetings

USD/JPY attracts buyers for the third straight day, recovering further from a one-month low ahead of Wednesday’s FOMC decision and the BoJ policy update on Friday. Meanwhile, expectations that the BoJ may hold off on aggressive rate hikes weigh on the Japanese Yen, and the US Dollar advances to a nearly two-week high, supporting the currency pair.

Gold holds above $4,000 as traders brace for Fed interest rate decision

Gold edges higher during American trading hours on Tuesday after trading in negative territory earlier in the day. A slight decline in Oil prices offers some relief, although a firmer USD limits the upside as traders await the Fed’s monetary policy announcement on Wednesday.

Australia CPI set to climb in September, fueling RBA rate-hike bets

The Australian Bureau of Statistics (ABS) will publish the September Consumer Price Index (CPI) on Wednesday at 00:30 GMT. The report is expected to show that inflation rose 4.2% from a year earlier, higher than the 4% posted in August. The monthly CPI is forecast at 0.7% following the 0.4% print from the previous month.

What can we expect from the RBNZ monetary policy decision?

On Wednesday, October 28 at 01:00 GMT, the Reserve Bank of New Zealand, led by Governor Anna Breman, is expected to raise the Overnight Cash Rate by 25 basis points, from 2.75% to 3%, as money markets price in a 100% chance. This would be the third-rate hike by the RBNZ, while the odds for another hike in December are nearly 50%.

Anthropic pledged $270 billion to Amazon, Google, and Microsoft. Here's who actually gets paid

Anthropic owes Amazon, Google, and Microsoft at least $269.4 billion for computing power, even if it uses less. All three sell its models and handle its billing, and Amazon and Google own stakes and lend it money, so they get paid regardless of how the IPO goes. The Dario Amodei-led Anthropic filed its initial public offering (IPO) on Monday, seeking a listing on the Nasdaq under the ticker ANT.