Forex Today – Asian Session: Preparing for Central Bank Week

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What to watch for on Tuesday, September 20:

The week started in slow motion amid a tight macroeconomic calendar, a UK bank holiday and multiple central bank announcements scheduled for later in the week.

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The dollar appreciated throughout the first half of the day, but eased in the American session, ending the day with modest losses against most of its main rivals. The currency moved along with market sentiment, the latter driven by equities. Asian and European indices closed in the red, but Wall Street shed the negative tone and trimmed most of its early losses.

Financial markets are likely to continue to await central bank decisions. This week, more than fifteen institutions have to decide between Wednesday and Thursday, including the US Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank. A massive quantitative tightening will be announced in the coming days, without taking into account the possible effects on economic growth.

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Meanwhile, Russia and China have agreed to expand their defense cooperation, focusing on joint exercises and weighing on market sentiment.

Asian and European indices closed in the red on Monday, but Wall Street trimmed most of its losses, with major indices ending the day mixed. US Treasury yields maintained upward pressure, with short-term bonds yielding the most.

The EUR/USD pair is trading around 1.0020, while the GBP/USD is hovering around 1.1430. The AUD/USD pair is currently trading at 0.6725, while the USD/CAD is down at 1.3255. Lastly, the USD/JPY pair is flat and changes hands at 143.20.

Commodities fell at the beginning of the day but ended it unchanged, with gold trading at $1,674 a troy ounce and WTI at $84.90 a barrel at the end of the American session.

Early on Tuesday, the focus will be on the RBA meeting minutes. Market traders will be looking for clues about future rate hikes.

Source: Fx Street

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