North American Summary and Highlights 17 Sep
Overview - The USD dipped on the FOMC dots but fully reversed that move during Powell’s press conference, ending firmer.
North American session
Ahead of the FOMC the USD was softened, with GBP/USD in particular firmer rising to 1.3560 from 1.3645 while EUR/USD reversed its earlier losses. USD/CAD however saw very marginal gains after the BoC eased by 25bps as expected, with a dovish leaning statement.
The FOMC eased by 25bps as expected but the dots looked for two further moves in 2026 rather than the expected one and the USD slipped, even with only 25bps more being seen in both 2026 and 2027 and the adjustments to the statement being mixed rather than dovish. USD/JPY fell to 145.50 and EUR/USD rallied above 1.19. However, the move was reversed during Powell’s press conference, with USD/JPY ending firmer near 146.80 and EUR/USD lower near 1.1825. Other pairs saw similar moves.
European morning session
The USD was mixed through the European morning, with a risk negative bias to trading. EUR/USD declined modestly, slipping from 1.1855 to 1.1845. USD/JPY also fell back 15 pips to 146.35 after making initial gains. EUR/CHF fell 15 pips to 0.9318. AUD/USD also slipped 5 pips lower to 0.6670, while USD/CAD was 5 pips higher at 1.3755. EUR/SEK was steady, but the NOK was the weakest G10 currency on the morning, with EUR/NOK rising 4 figures to 11.62
EUR/GBP fell 10 pips to 0.8680 with GBP/USD unchanged. There was little initial reaction to the UK CPI data, which came in marginally weaker than expected with the core rate falling to 3.6% y/y, although the headline was in line with consensus at 3.8%. The final Eurozone CPI data saw the headline rate revised slightly lower to 1.0% but the core was unrevised at 2.3%.