Will the U.S. dollar’s rally continue ahead of next week’s FOMC meeting?

Will the U.S. dollar’s rally continue ahead of next week’s FOMC meeting?

17.09.2021

Although U.S. stock prices rose toward the close yesterday, they failed to surpass the previous day’s closing level, resulting in a market environment characterized by falling stock prices, rising interest rates, and lower crude oil prices. The yield on the 10-year U.S. Treasury note rose sharply and is now hovering around 1.34%. WTI crude oil fell back to the $72.29 range, while gold also declined in tandem with the rise in U.S. Treasury yields, settling in the $1,756 range.

The Dollar Index has risen slightly to 92.9, indicating a strong advance by the U.S. dollar. The Australian dollar, which had been rebounding recently, fell under pressure from the U.S. dollar’s strength, dropping from 0.734 to 0.727.On the daily chart, the pair is falling as it is clearly capped by the 20-day moving average, so we need to closely monitor whether yesterday’s decline will continue. The AUD/JPY pair fell slightly yesterday but has recovered during today’s Asian trading session and is currently trading around 80.06.

Today’s key economic indicators include UK retail sales at 3:00 PM, the Eurozone Consumer Price Index at 6:00 PM, and the University of Michigan Consumer Sentiment Index at 11:00 PM. With the US dollar regaining strength, and with next week’s FOMC meeting on the horizon, we will be closely monitoring how currency strength and weakness evolve across various countries over the weekend.