Published: 2024-09-18T10:20:10.000Z
Psychology for major markets September 18th
Senior FX Strategist
5
USD awaits FOMC with market pricing a 50bp Fed cut as a 65% chance but a big majority of economists expecting only a 25bp cut.
EUR/USD – Favouring the upside as market anticipates 50bp Fed easing while European yields continue to edge higher. Focus on the Fed, with two way short term risks but medium term upside bias remains.
USD/JPY – Showing some corrective strength as equity markets edge higher on solid US data, but yield spreads and trends still suggest downside risks dominate medium term.
EUR/GBP – Moving down after rise in UK CPI in August further reduced expectations of BoE rate cut this month, but 0.84 remains strong EUR/GBP support.
AUD/USD – Better risk sentiment supporting a move towards the top of the year’s range above 0.68, but better China sentiment likely required for a convincing break higher.
Equities – Focus on the Fed with increased expectations of Fed easing supportive.