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Forex Today: Instability continues ahead of key events

Here’s what you need to know to trade today Tuesday September 19:

Following Monday’s indecision, markets remain choppy early Tuesday, with investors refraining from taking large positions ahead of this week’s important central bank meetings. In the European session, Eurostat will publish revisions to the harmonized consumer price index for August. In the second half of the day, construction permits and housing starts will be published on the US economic agenda. Finally, Statistics Canada will publish the Consumer Price Index (CPI) for August.

The modest improvement seen in risk sentiment caused the US Dollar (USD) to lose some interest during US trading hours on Monday. The Dollar Index, which tracks the currency’s performance against a basket of six major currencies, lost 0.25%, but managed to stabilize above 105.00. For its part, the yield on the 10-year US Treasury bond fell 0.6% to 4.3%, which was an additional drag on the dollar. Early Tuesday, U.S. stock index futures were trading flat.

Price of the Dollar this week

The following table shows the percentage change of the United States Dollar (USD) against the main currencies quoted this week. The US Dollar was the weakest currency against the Canadian Dollar.

USD -0.13% 0.15% -0.33% 0.04% -0.05% -0.28% 0.06%
EUR 0.13% 0.28% -0.21% 0.17% 0.08% -0.14% 0.19%
GBP -0.15% -0.28% -0.48% -0.11% -0.22% -0.42% -0.10%
CAD 0.33% 0.20% 0.46% 0.34% 0.25% 0.04% 0.37%
AUD -0.04% -0.15% 0.11% -0.36% -0.11% -0.32% 0.01%
JPY 0.05% -0.08% 0.20% -0.25% 0.09% -0.23% 0.12%
NZD 0.27% 0.16% 0.43% -0.05% 0.32% 0.21% 0.35%
CHF -0.04% -0.18% 0.10% -0.37% -0.01% -0.12% -0.33%

The heat map shows the percentage changes of the major currencies against each other. The base currency is chosen in the left column, while the quote currency is chosen in the top row. For example, if you choose the euro in the left column and scroll down the horizontal line to the Japanese yen, the percentage change that appears in the box will represent EUR (base)/JPY (quote).

Minutes from the Reserve Bank of Australia’s (RBA) September policy meeting showed earlier in the day that policymakers agreed that the assumption of keeping the policy rate stable was stronger, as Recent data did not materially alter the economic outlook. “Members recognize the value of allowing more time to see the full effects of the previous lockdown on the economy,” the RBA said in its release, reiterating that policy will be guided by incoming data and risk assessment. He AUD/USD did not react and moved sideways below 0.6450.

He USD/CAD fell below 1.3500 on Monday as rising crude oil prices allowed the commodity-sensitive Canadian Dollar to outperform its rivals. A barrel of West Texas Intermediate rose more than 1% on Monday and hit a new 2023 high above $92. On an annual basis, Canada’s CPI is forecast to rise 3.8%, up from the 3.3% increase recorded in July.

He EUR/USD benefited from the USD’s weakness in the American session and closed the day on Monday in positive territory before entering a consolidation phase slightly below 1.0700 early on Tuesday.

He USD/JPY go on fluctuating below 148.00 in the European session. Japanese Industry Minister Yasutoshi Nishimura said Tuesday that at some point the Bank of Japan will not be able to use monetary policy to buy time. For his part, Japanese Prime Minister Fumio Kishida said that he plans to explain Japan’s financial and economic policy in New York.

He GBP/USD it briefly rose above 1.2400 on Monday, but erased its recovery gains to end the day flat. The pair is oscillating in a narrow channel around 1.2380.

He Gold took advantage of the pullback in US Treasury yields on Monday and rose to a new two-week high above $1,930. XAU/USD fell in the Asian session on Tuesday, but manages to stay above that level.

Source: Fx Street

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