Here is what you need to know on Wednesday, September 22:
Markets are cautiously optimistic as Evergrande promised to pay some of its debt, alleviating dollar buying some pressure. The focus shifts to the US Fed, which is set to signal when it tapers its bond-buying scheme.
Evergrande crisis: China's distressed real-estate behemoth pledged it would pay its yuan-dominated debt payments due Thursday, providing some relief for investors. The People's Bank of China (PBOC) injected more liquidity into markets.
Analysts are divided between those worrying that Evergrande's issues are a "Lehman moment" and those thinking it is manageable. Early on Wednesday, the optimists seem to have the upper hand, despite the lack of enough details from the embattled real estate firm. It is unclear what happens to dollar-dominated payments and the risks of contagion to other firms.
Cautious risk on: S&P 500 futures are on the rise on Wednesday after the index ended Tuesday in the red. The safe-haven dollar is edging lower, albeit in a limited fashion.
The Federal Reserve is set to leave its policy unchanged but hint about the timing of tapering its $120 billion/month scheme. Markets will want to know the exact start date, the length of this reduction and also sniff out when the Fed intends to raise interest rates. Apart from the statement, the bank also publishes new forecasts.
Fed Chair Jerome Powell holds a press conference which could prove decisive for the market reaction. Recent softer inflation and a disappointing jobs report could keep Powell, a dove, from conveying a message of imminent tightening.
See Fed Preview: Three ways in which Powell could down the dollar, and none is the dot-plot
German elections: Chancellor Angela Merkel has joined Armin Laschet, her embattled successor at the CDU/CSU, in an effort to boost his campaign. Center-left candidate Olaf Scholz remains in the lead ahead of the September 26 vote. EUR/UD is holding above 1.17.
Trade: UK Prime Minister Boris Johnson is exploring joining the North-American USMCA free trade agreement as a substitute to a direct Anglo-American trade deal. GBP/USD is changing hands at around 1.3650.
The Bank of Japan left its interest rate unchanged at -0.10%, as expected. USD/JPY is more influenced by the Evergrande crisis than anything else, trading at around 109.50.
Cryptocurrencies have stabilized after suffering a rapid dip on Tuesday. Bitcoin is trading around $42,000, Ethereum is around $2,900 and Ada is clinging to $2.
Commodities: Gold is hovering around $1,775, consolidating its gains related to somewhat softer US bond yields. Oil WTI Crude Oil is hovering around $71.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.