• USD/CHF is pressing into key resistance around 0.8170–0.8200 ahead of the Fed decision

• Broadly speaking, how the Fed decision unfolds will dictate the near-term direction

• With a hike fully priced, the bar for a further hawkish surprise is high, leaving USD/CHF vulnerable to a pullback

• A hold would represent the clearest downside risk for USD/CHF

• As seen following the Treasury buyback surprise, CHF would likely be among the primary beneficiaries

• In that scenario, renewed focus on the debasement trade could put broader pressure on the USD

• A hawkish hike could push USD/CHF through the 0.8170-0.8200 zone and onto fresh 1-year highs

• 100-week MA at 0.8223. Sustained move above here would open up 0.8350-75

• Related comment: Fed hiking cycles and the dollar
USDCHF daily chart

Justin McQueen is a Reuters market analyst. (The views expressed are his own). ((Email: ))

EUR/USD has been on a downward trajectory since September 9, as markets priced in an anticipated Fed rate increase while simultaneously raising the odds of further hikes to come—a dynamic that poses risk to traders betting on a sustained decline in the pair.

The currency pair has fallen nearly 1.6% from its August high, driven largely by a sharp rally in oil prices that has stoked fears of resurgent inflation. This oil-driven surge has fed through to U.S. short-term rates and Treasury yields , which have climbed as investors anticipate the energy rally spilling over into broader price pressures across the economy.

However, inflation-sensitive markets have told a different story.

Inflation breakevens and inflation-linked swap rates have risen modestly since late July and early August, but without the intensity seen in nominal rates. Notably, U.S. 2-year , 5-year , and 10-year

inflation swaps have recently pulled back from their rally, as have shorter-dated breakevens —and crucially, none of these measures have broken out of the ranges they've held for the past two years.

This divergence suggests that traders expecting the Fed to adopt an aggressively hawkish tone and signal additional hikes beyond today's meeting may end up disappointed.

Should that scenario play out, the dollar and U.S. rates could face downward pressure, opening the door for EUR/USD to see increased upside risk rather than the continued weakness bears are anticipating.
usinfswp


usbei


eurusd

(Christopher Romano is a Reuters market analyst. The views expressed are his own)

The following are brief expectations for today's September FOMC as compiled from the related notes of 10 banks.

Out of the 10 banks projections, 2 banks (Credit Agricole, and Standard Chartered) expect the Fed to remain on hold, while 8 banks expect a 25bp hike at today's meeting. 

Danske: We revise our call for Wednesday's FOMC meeting and now expect a 25bp rate hike. We maintain our forecast for 25bp increases at both the December and March meetings, taking the Fed Funds rate to 4.25-4.50% towards the end of 2027 (prior: 4.00-4.25%).

CIBC: The Fed simply can’t wait on the sidelines, and it’s not because core CPI was one tick higher than expected. Failing to at least begin nudging the fed funds rate higher would raise two risks that exceed the risks to the economy from a higher policy rate.

Standard Chartered: We continue to expect the FOMC to hold policy rates on 16 September...An unneeded hike will have a reputational impact if data suggest inflation pressures are diminishing.

Bank of America: The Fed is now widely expected to hike Wednesday by 25bps. Sept FOMC communications likely lean hawkish. SEP will show 50bps of total hikes in '26, Waller may dovish dissent.

Credit Agricole: The Fed’s September rate decision is a very close call, as we see the upcoming FOMC meeting as a truly live one. Even if we have some sympathy for the arguments in favour of a hike, we continue to lean towards the Fed staying on hold once again.

Goldman Sachs: We added a 25bp rate hike at this week's September FOMC meeting to our forecast last Friday following the August CPI report. We continue to expect two cuts in 2027 but now expect them in September and December (vs. June and December previously). 

MUFG: The Fed is now expected to begin hiking rates today after last week’s disappointing US inflation data showed a lack of progress for underlying inflation back towards the Fed’s target. Additionally, the Fed is under pressure to begin hiking rates today to back up their inflation fighting credibility under new Chair Kevin Warsh.

ING: Markets are fully expecting a 25bp hike to 4.0% today, and a surprise hold or strong dovish dissent could have a materially negative impact on the dollar. But that’s a small risk, as the FOMC is likely mindful of any adverse Treasury-market implications. Openness to further hikes by Warsh can leave the dollar broadly supported.

UniCredit: A rate hike (our baseline) should be largely neutral for USTs as markets already discount a bit more than three hikes. If the Fed leaves rates unchanged, we see a clear risk of the long-end selling off as investors factor in a higher inflation risk premium, while yields at the short end could decline.

SEB: We change our forecast to a 25 bp hike after the higher-than-expected August CPI. The large emphasis that the Fed has put on this data makes it very hard for them to credibly abstain from a hike. Still, uncertainty is unusually high.

• Cable hits 1.3458 after falling further from 1.3493 (pre-UK CPI data high)

• 1.3458 is the lowest level since August 7 (1.3455 is 200DMA)

• Dollar stronger before likely rate hike from the Fed at 1800 GMT

• Ultra-hawkish hike from Fed might depress GBP/USD towards 1.3400

• Bank of England rate hold expected on Thursday, at 1100 GMT

• U.S. August retail sales data due at 1230 GMT; up 0.8% expected

GBPUSD

(Robert Howard is a Reuters market analyst. The views expressed are his own)

• Cable hits 1.3466 after extending south from 1.3493 (pre-UK CPI data high)

• 1.3466 is two pips shy of Monday's five-week low (1.3455 is 200DMA)

• UK CPI rose to 3.1%, as expected; BoE rate hold still expected on Thursday

• Warsh's words may matter more than the anticipated Fed rate hike today

• Fed rate decision at 1800 GMT; Warsh briefing starts at 1830 GMT

• U.S. August retail sales data due at 1230 GMT; up 0.8% MM forecast

GBPUSD

(Robert Howard is a Reuters market analyst. The views expressed are his own)

Sept 16 (Reuters) - The euro has been trading with a sideways bias versus the dollar since June 2025. So, what will it take to shake EUR/USD from its range?

Several established drivers could yet trigger a more sustained directional move for EUR/USD, away from the 1.1325–1.2084 range according to EBS prices.

Interest rate differentials remain the most direct lever. The ECB has turned more hawkish, with policymakers saying tighter monetary policy may be required to contain inflation that's stuck above 3%, and officials expecting to raise interest rates further, with another increase possible as soon as next month. The Fed, by contrast, has held steady for most of the year, keeping the benchmark rate at a target range of 3.50% to 3.75%. That said, rate-hike bets have recently increased for this week's meeting, with FedWatch predicting a 66% chance the Federal Open Market Committee will hike by a quarter-point at its upcoming Wednesday meeting.

A break above 1.2084 would likely need the Fed to pivot toward cuts while the ECB holds firm — narrowing the real-yield gap. A break below 1.1325 would require the opposite: renewed Fed hikes or ECB capitulation. Much could depend on the message late in Wednesday's session. Chair Warsh has been notably tight-lipped on forward guidance, having been adamant about not providing markets with forward guidance, preferring that officials have a "good family fight" over the data at FOMC meetings. If Warsh surprises with no hike, or maintains this opacity even after a hike, the dollar could come under pressure.

Growth divergence is the second pillar. Eurozone growth has surprised higher, with ECB staff projecting growth of 0.9% for 2026 and 1.4% for 2027, an upward revision reflecting the resilience of the euro area economy. Meanwhile, U.S. GDP growth has decelerated to 1.5% quarter-over-quarter, even as core inflation stays sticky. A widening or narrowing of this gap could force EUR/USD outside its range.

U.S. fiscal policy is a structural wild card — large shifts in Treasury issuance, fiscal expansion, or foreign reserve diversification could weigh on the dollar independent of the rate cycle, potentially overriding rate differentials entirely.

Finally, geopolitical shocks tied to energy remain central. The ECB has noted the war in the Middle East is generating inflation pressures, with implications depending on the intensity and duration of the energy shock. A major escalation could pressure EUR/USD lower; a resolution could unlock a move higher.
EUR/USD monthly chart:

(Peter Stoneham is a Reuters market analyst. The views expressed are his own)

• Overnight (Thursday) expiry EUR/USD implied volatility warns of Fed induced volatility but not excessive

• Broader EUR/USD implied volatility trades near long term lows - benchmark 1-month expiry just 4.9

• Risk reversals show barely any directional volatility risk premium - 1-3-month just 0.15-0.1 EUR puts over calls

• Trade flow remains tepid and lacks any real directional bias - strikes mostly within 1.1400-1.1700 range

• Huge strike expiries in the 1.1500-1.1600 zone this week are tightening grip on current EUR/USD range

• Related comment - EUR/USD: What FX options say ahead of the Fed meeting
EUR/USD FXO implied volatility


EUR/USD 25 delta risk reversals

(Richard Pace is a Reuters market analyst. The views expressed are his own)

• Large 0.7130 option expiry anchors AUD/USD ahead of Fed event risk

• The size of the strike for the New York cut at 1400 GMT is A$1.3 billion

• Fed looks likely to raise its policy rate by 25 bps to 3.75-4.0% at 1800 GMT

• Ultra-hawkish Fed hike might depress AUD/USD through 0.7100

• 0.71085 was Monday's base; lowest level since August 20

• Next RBA rate decision on Sept 29: quarter-point hike to 4.6% looks likely

AUDUSD

(Robert Howard is a Reuters market analyst. The views expressed are his own)

• XAU/USD up 0.75% in Asia ahead of crucial Fed rate decision later Wednesday

• Probability of a Sep hike at 92%; FOMC statement and Warsh presser key

• Gold downside limited as hawkish Fed outlook largely priced in

• Officials may be reluctant to commit to additional tightening beyond Sep

• May disappoint hawkish investors who have priced in 3 rate hikes by March

• XAU has built strong base at $4250-$4260; rally to $4,400, $4,430 likely

• Asia range $4274.74-$ 4,340.73
XAU:

(Krishna Kumar is a Reuters market analyst. The views expressed are his own.)

• Shares of Australia's Pantoro Gold jump as much as 11.1% to A$2.865, marking their biggest intraday gain since August 26

• Stock hits its highest level since September 7

• Gold producer reports high-grade drilling results from Racetrack gold discovery at its Norseman project in Western Australia, extending mineralisations to nearly 900 metres

• YTD, stock down 42.2%, including the day's moves

(Reporting by Paridhi Minda in Bengaluru)

• GBP/USD steady as markets brace for crucial Fed rate decision later Wed

• Probability of a Sep hike at 92%; FOMC statement and Warsh presser key

• Hawkish Fed outlook priced in, USD upside likely limited

• UK August inflation data due Wed; BoE expected to hold rates on Thursday

• UK food price inflation could hit nearly 7% in 2027- industry researcher

• Resistance 1.3535, 1.3560; support 1.3465-70, 1.3444-54, the 100 & 200-DMAs

• Tuesday range 1.34645-1.3501, Asia 1.3466-1.34805
GBP:

(Krishna Kumar is a Reuters market analyst. The views expressed are his own.)

• Shares of Australia's Auric Mining rise as much as 8.7% to A$0.250, marking their biggest intraday pct gain since September 9

• Stock hits its highest level in a week

• Gold explorer says it has acquired key processing plant infrastructure for its Burbanks gold project for A$1.2 million ($854,640.00)

• The purchase includes crushing, material handling and milling equipment needed for the initial 600ktpa processing plant design

• Co says the acquisition keeps development studies on track for restarting the Burbanks processing plant in Q1 2028

• YTD, stock down 10.9%

($1 = 1.4041 Australian dollars)

(Reporting by Paridhi Minda in Bengaluru)

• AUD/USD -0.1% Wed as Fed looks set to hike FFR for 1st-time since Jul 2023

• Broad USD index +0.1%, and UST yields remain elevated across the curve

• Saudi Arabia cancels shipments in wake of pipeline damage, WTI $105 a barrel

• AUD drifts listlessly pre-Fed, chance of fall toward 0.7080 100-DMA rising

• RBA officials (including Bullock) before parliamentary committee on Fri

• Range Asia 0.7121-315 support 0.7080 0.6920, resistance 0.72825 0.7661
AUD Daily 21/100/200-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• USD/JPY has broken back above 155.00, yesterday 154.22 to 155.25 EBS

• Asia so far this morning 155.03-43 and looking better bid for now

• Higher US rates with Treasury 10s above 5.0%, likely Fed hike cited

• Higher crude oil prices on Middle East conflict escalation boost to USD too

• USD/JPY highest since 156.30 on September 7, some resistance ahead at 156.00

• USD/JPY now well above 154.13-33 hourly Ichimoku cloud

• Hourly Ichimoku kijun 154.82 ahead, 200-HMA 154.20 below

• Nearby option expiries today include 155.00-01 $1.6 bln, 155.50-65 $699 mln

• Also 154.90 $584 mln below, 156.00 $641 mln above

• JGB-US Treasury rate differentials wider, in 2s @282, 10s @199 bps

• Related comments , , ,

• And , also , on Fed

• US markets , , ,

• On Middle East conflict , for more click on [FXBUZ]

USD/JPY:


JGB-US Treasury 2-year interest rate differential:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• NZD/USD -0.4% from Tue 0.5781 high, cedes ground ahead of Fed decision Wed

• NZ Q2 current account -1.67 bln quarter (poll -2.57 bln), -14.58 bln annual

• DXY +0.2%, UST yields higher across the curve as Fed hike expectations build

• Saudi Arabia cancels shipments in wake of Houthi attacks, Brent crude +2.7%

• NZD now targeting 0.5627 ytd low, hawkish Fed may prompt move pre-month end

• RBNZ Assistant Governor Angus McGregor due to speak Thur

• Range NZ 0.57566-62, support 0.5755-60 0.5627, resistance 0.5995 0.6012
NZD Daily 21/55/100-DMA


DXY Daily 55/100/200-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

Bank of America Global Research discusses the USD outlook into the September FOMC decision on Wednesday.

"There remains considerable two-way risk for the USD at Wednesday's meeting. At the extremes, we see the FOMC-related bull and bear case for the USD as the following:

Bullish USD case: The Fed hikes and some combination of the following are met: 1) The SEP shows broadening support for additional hikes (relative to the June SEP); 2) growth and inflation forecasts are elevated even in the context of further hike guidance; 3) Chair Warsh himself (intentionally or unintentionally) offers some indication that a more prolonged campaign is necessary to return inflation on the path to 2%.

Bearish USD case: Of course, if the Fed opts to hold in the face of sticky inflation and market pricing, we expect the dollar to depreciate swiftly and significantly. But even in the event of a hike, the USD could soften with dovish or non-committal language from Warsh," BofA notes.

Bottom line: Fed expected to hike 25bp. SEP to show 50bps of total hikes in '26. Fed choice is simple: hike or bond spike. Warsh likely to deliver hawkish hike, which should support higher front end rates & twist flattening of UST curve. USD outcome will be determined by Fed ability to "out-hawk" market expectations & other G10 central banks.

• AUD/USD +0.2% from Tue 0.71171 low in subdued trading as FOMC outcome looms

• Futures pricing implies 93.2% chance of FFR hike Wed, DXY & UST yields firm

• WTI +4.0% to $105.48 a barrel as Saudi Arabia starts cancelling EU shipments

• AUD rangebound pre-Fed, but eventual drift toward 0.7080 100-DMA likely

• RBA officials (including Bullock) before parliamentary committee on Fri

• Overnight range 0.71173-34 support 0.7080 0.6920, resistance 0.72825 0.7661
AUD Daily 21/55/100-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• EUR/USD eased within narorw 1.1527-52 range as surge in oil lifts dollar, yields

• Losses are cushioned by haven-related dip buying ahead of large 1.1500 option expiries this week.

• Upside is capped by the 100-DMA at 1.1554, while the 55-DMA at 1.1522 provides support.

• Volatility remains subdued ahead of Wednesday's Fed decision, where a 25 bp rate hike is expected

• A break beyond the 1.14-1.16 range is needed to generate momentum

• ECB's Moulin: higher yields reflect increased debt issuance and rising inflation expectations

• German Chancellor Friedrich Merz canceled NY trip due after electoral setbacks
EUR

(Robert Fullem is a Reuters market analyst. The views expressed are his own.)

• GBP$ soft in NY afternoon, -0.14% at 1.3478; NorAm range 1.3497-1.3471

• Pair hovers near trend low ahead of Wednesday's expected Fed 25bp hike

• BoE seen on hold on Thursday; LSEG's IRPR indicates +9bp (36% odds) by BoE

• Further out the curve, BoE policy seen slightly above the Fed may stall declines

• Fiscal concerns remain a key focus of cable traders as 10-yr gilts trade at 19-yr highs

• GBP$ supt 1.3464 Mon/Tues lows, 1.3443 flat 100-DMA, 1.3407 50% of 1.3140-1.3675

• Res 1.3500 big-figure resistance, 1.3517 the falling 10-DMA, 1.3566 daily high Sept 9

GBP$ Chart:

(Paul.Spirgel is a Reuters market analyst. The views expressed are his own)

CIBC Research previews the September FOMC decision.

"The Fed simply can’t wait on the sidelines, and it’s not because core CPI was one tick higher than expected. Failing to at least begin nudging the fed funds rate higher would raise two risks that exceed the risks to the economy from a higher policy rate. For one, long term interest rates that feed into mortgages could end up spiking even further if the Fed seems unwilling to lean against inflation. If the bond market didn’t do that immediately, upcoming increases in headline CPI could do so by adding to inflation expectations," CIBC notes.

"The doves on the Fed have likely flipped over in the face of climbing bond yields, a strong jobs report, a slight uptick in core CPI and, importantly, an escalation in oil prices without much assurance on when that might end. Warsh cannot allow himself to be in a minority dissenting camp in such an early vote in his role as Chair, and his last speech opened the door for him to vote for a hike if that was the sentiment of the committee," CIBC adds.

• AUD$ holds slight loss in NY afternoon, -0.12% at 0.7132; NorAm range 0.7134-0.7124

• FX market subdued ahead of Fed rate decision Wednesday; more action in bonds, oil

• Oil rise tempers AUD weakness, though broader risk-off stirs haven flows into USD

• Alt-CCY BTC hit hard on rising rate expectations, gold dip less austere

• RBA also seen on hawkish path, LSEG's IRPR prices 1.4 rate hikes by Dec meeting

• AUD$ res 0.7141 Tuesday high, 0.7173 daily conversion line, 0.7200 psychological lvl

• Supt 0.7109 daily low Sept 14, 0.7100 big-figure support, 0.7080 the 100-DMA
AUD$ Chart:

(Paul Spirgel is a Reuters market analyst. The views expressed are his own.)

Goldman Sachs Research previews the September BoE meeting on Thursday.

"We expect the MPC to hold Bank Rate at 3.75% at this week's (17 September) meeting. A 6-3 vote looks most likely, though there is some risk of a 5-4 split. We expect the communications to acknowledge that risks of material second-round effects have intensified since the last meeting given rising energy prices," GS notes.

"Our baseline is that the Committee reiterates that it stands ready to act as necessary to return inflation to target but refrains from providing a strong steer on the upcoming meetings, though there is some risk that the minutes signal that policy tightening is likely to be needed," GS adds.

EUR/USD needs a decisive break of the 1.14-1.17 range before a sustained trend can emerge. A thinning option expiry calendar may open that door.

The pair remains trapped between a rising 55-day moving average near 1.1522 and the 100-day moving average at 1.1554, leaving price action compressed and momentum muted. Nearby option-related flows are also contributing to the stalemate, as cash hedging activity around large expiries continues to attract and contain spot.

A cluster of 1.1550 strikes expires on Tuesday, which could modestly ease resistance for bulls. However, additional option interest remains concentrated closer to 1.16 later this week. On the downside, roughly EUR9 billion of expiries are parked near 1.15, with a similar amount around 1.14. These sizable option positions may continue to anchor EUR/USD until they roll off, after which price action could become more directional.

The key question is what catalyst can break the impasse. Low one-week implied volatility suggest the upcoming Fed decision may not generate a lasting move. Mid-month, dip-buying on Tuesday may be a relative-value play against rising global bond yield or the view that a Fed hike may be a one-off event.

ECB speakers this week may reinforce a tightening bias if elevated energy prices persist, though that support could prove temporary. Political risks also linger should pro-EU cohesion weaken.

EUR/USD remains near its April 2025 high of 1.1573 and is testing the upper end of its four-month 1.14-1.17 range. A break above 1.17 or below 1.14 is needed to trigger a sustained move. Until then, range trading remains the preferred strategy.
EUR


EUR expiry

(Robert Fullem is a Reuters market analyst. The views expressed are his own.)

Standard Chartered Research previews the September FOMC decision.

"The correct Fed policy decision in our view is straightforward - stay on hold until the noise from tariffs and data revisions dissipates....," SC notes.

"We continue to expect the FOMC to hold policy rates on 16 September...An unneeded hike will have a reputational impact if data suggest inflation pressures are diminishing 

An on-hold decision may hurt the USD and the long end of the curve; a hike would likely stabilise both. The statement and SEP may change little; Warsh looks set to face a difficult press conference," SC adds.