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21.09.2023 Market Report


EUR/USD is trading close to weekly lows below 1.0650 in the early European morning on Thursday.  The Fed, as expected, kept rates unchanged but indicated that one more rate hike before the year-end could be appropriate. US yields surges to multi-year highs, driving the US Dollar higher. 


GBP/USD is consolidating losses in early Europe on Thursday, trading near a five-month low at 1.2304 set on Wednesday. The pair is weighed by the Fed’s hawkish stance and increased odds of a BoE rate hike pause, following a surprise fall in UK inflation. 


The USD/JPY pair surges above the 148.00 mark after bouncing off the 147.47 low during the early Asian trading hours on Thursday. The upside in the US Dollar (USD) is bolstered by the hawkish stance of the Federal Reserve (Fed) following Wednesday’s policy meeting. As of writing, the pair is trading at 148.41, up 0.05% on the day. However, traders remain cautious as Japanese authorities made a verbal intervention early on Wednesday.


The AUD/USD pair extends the previous day’s sharp retracement slide from levels just above the 0.6500 psychological mark, or a nearly three-week high, and continues losing ground through the Asian session on Thursday. The downward trajectory drags spot prices to the lower end of the weekly range, around the 0.6420-0.6415 region, and is sponsored by sustained US Dollar (USD) buying.


The NZD/USD pair recovers its recent losses around 0.5937 during the early Asian session on Thursday. The US Dollar Index (DXY) rose to 105.44 after retreating to 104.60 after the FOMC September meeting. Meanwhile, US Treasury yields surged, with the 10-year yield hitting 4.40%, the highest since 2007, and the 2-year yield reaching 5.17%, which was the highest since 2006. NZD/USD currently trades near 0.5938, up 0.17% on the day. 


The USD/CAD extends its upside and trades in positive territory for the second consecutive day during the early Asian session on Thursday. The rebound in the pair is supported by the hawkish stance of the Federal Reserve (Fed) after its policy meeting on Wednesday and the revised interest rate expectations for 2024. The pair currently trades near 1.3485, gaining 0.18% on the day.


The USD/CHF pair gains momentum near the 0.9000 psychological mark during the early European session on Thursday. Market players await the Swiss National Bank (SNB) interest rate decision later in the day.

SNB is expected to raise additional interest rates by 25 basis points (bps) from 1.75% to 2% on Thursday. However, if SNB offers hints about its last hike, the monetary policy divergences between the US and Switzerland might continue to drive the pair higher.


Oil prices fell in early Asian trade on Thursday, after posting the largest fall in a month in the previous session, as U.S. interest rate hike expectations offset the impact of drawdowns in U.S. crude stockpiles.


Gold price is trading at the lowest level in three days near $1,925 early Thursday, challenging critical confluence support amid an unabated US Dollar demand and surging US Treasury bond yields, courtesy of a hawkish US Federal Reserve (Fed) interest rate pause on Wednesday.

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