The key event next week will be the FOMC meeting. In addition, the Bank of Japan, the Swiss National Bank, and the Bank of England will also have their respective policy meetings. As for economic data, the most important release will be the preliminary September PMIs.
Here is what you need to know for next week:
The US Dollar Index (DXY) posted its ninth consecutive weekly gain, closing above 105.00. This continued streak is supported by the strong performance of the US economy. Economic data released this week provided evidence of a rebound in inflation, although core rates slowed.
The Federal Reserve will have its monetary policy meeting, and it is expected to keep interest rates unchanged on Wednesday. Fed Chair Powell will later hold a press conference. No major changes are anticipated from the Fed. A pause, with the recognition that they might raise interest rates further if inflation halts its slowdown, is a possibility. The current state of the economy indicates that it is capable of accommodating to another rate hike. A dovish tilt has the potential to trigger a sharp correction in the US dollar and a rally in commodity prices.
The Bank of England is set to announce its decision on Thursday, following the release of UK consumer inflation data on Wednesday. Market expectations point to a 25 basis point rate hike. However, earlier expectations of a larger hike have softened due to recent UK data and the economic outlook, causing GBP/USD to tumble below 1.2400 to its lowest level since early June.
The Euro also declined after the European Central Bank (ECB) signaled that its recent rate hike may be its last, leading financial markets to interpret the message as dovish. The key report next week will be the European preliminary September PMIs.
EUR/USD has experienced its ninth consecutive weekly decline, the longest losing streak since its creation. It reached a low of 1.0631 during the week, slightly above the 200-week Simple Moving Average, and remains under pressure.
The Canadian Dollar outperformed, supported by the rally in crude oil prices, resulting in its best week against the US dollar since March. USD/CAD lost over a hundred pips and is testing the 1.3500 support area. Canada will release the August Consumer Price Index next week.
The Bank of Japan is expected to maintain its current policy in its upcoming decision. USD/JPY ended the week near the 148.00 area, which acted as resistance last week and remains a level to break.
Antipodean currencies finished the week with modest gains against the US dollar, with AUD/USD and NZD/USD holding in recent ranges. The stronger US dollar was partially offset by improved risk sentiment and signs of stabilization from China.
Like this article? Help us with some feedback by answering this survey:
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 drops below 1.0800 ahead of key US jobs data

EUR/USD is dropping below 1.0800 in the European session on Wednesday. The pair is dragged by a renewed uptick in the US Dollar, as markets trade with caution ahead of a busy EU and US economic docket. US ADP is the key event risk.
GBP/USD battles 1.2600, with eyes on US ADP data

GBP/USD is trading close to 1.2600, snapping a two-day losing streak in European trading on Wednesday. The modest US Dollar decline acts as a tailwind for the pair but the Pound Sterling struggles amid a cautious market mood. US jobs data awaited.
Gold finds buyers near $2,020, awaits US ADP jobs data

Gold is finding a floor near $2,020 early Wednesday, snapping a two-day correction from all-time highs of $2,144 set on Monday. XAU/USD price capitalizes on a broad US Dollar retreat, as Greenback buyers take a breather following this week’s upswing and ahead of the top-tier US ADP Employment Change data.
Bitcoin-based meme coin ORDI price action wobbles after 1,100% rally

The Bitcoin-based BRC-20 meme coin, which had people confused as being an actual valuable token, is now slowly creeping up to that status. ORDI price rise over the past couple of days has been astonishing, and with BTC driving the price and crossing $44,000, ORDI is also gaining rapidly. But not for long.
The Dollar is struggling to trend

For the last three trading sessions, the dollar index has been crossing up and down the 200-day moving average every day. All in all, the flirting with this level has been going on for more than three weeks, during which neither bulls nor bears were able to form a stable trend.