Caution over U.S. dollar movements following the FOMC meeting

Caution over U.S. dollar movements following the FOMC meeting

23.09.2021

The previous day, the Federal Open Market Committee (FOMC) kept the federal funds rate unchanged at 0–0.25%. Following remarks by Federal Reserve Chair Powell that “tapering could begin as early as November,” the VIX (fear index) fell by about 15% and settled around 20.8. As a result, the USD/JPY exchange rate rose to 109.9.The market has shifted away from the risk-off sentiment that prevailed until the previous day, returning to a risk-on mood characterized by rising stock prices and a stronger dollar.

From a technical perspective, if USD/JPY breaks above the immediate resistance level at 110.01, it is likely to rise further toward 110.20; conversely, if it breaks below the immediate support level at 109.17, it is likely to head toward 108.75, which is near the daily 200-day moving average. However, given that the support level at 109.00 has held firm since last month, we should also consider the possibility of the pair trading within a range.

Today, at 4:15 PM, France’s Manufacturing/Services PMI; at 4:30 PM, Germany’s Manufacturing/Services PMI and Switzerland’s policy rate and statement; at 5:00 PM, the Eurozone’s Manufacturing/Services PMI and the ECB’s Monthly Report; at 5:30 PM, the UK’s Manufacturing/Services PMI; at 8:00 PM, the UK’s policy rate and statement;Turkey’s TCMB policy rate and statement, at 9:30 PM Canadian retail sales and U.S. initial jobless claims, at 10:45 PM U.S. Manufacturing/Services PMI, at 11:00 PM U.S. Leading Economic Index, and at 11:30 PM U.S. weekly natural gas inventories. Since the Manufacturing/Services PMIs for each country are preliminary figures, investors should be on alert for significant price movements.

Past Market Reports

1. 17.04.2026New

   Will the market wait and see how much further the U.S. dollar can rise against the yen?

2. 16.04.2026New

   Will the weakening Swiss franc recover? Attention is turning to price movements during European trading hours.

3. 15.04.2026New

   Market participants are likely keeping a close eye on the upside potential of the euro, which has risen against the U.S. dollar

4. 14.04.2026New

   Should we keep an eye on remarks by key figures in the U.S. and try to gauge the direction of currency strength?

5. 13.04.2026New

   Market participants are likely watching for signs of a rebound in the Canadian dollar, which fell against the U.S. dollar following the release of employment figures

6. 10.04.2026

   Will the weakening Swiss franc continue to strengthen against the yen, or should we wait and see?

7. 09.04.2026

   Will the U.S. dollar, which has fallen against the yen, continue its downward slide, or should we wait and see how the market moves?

8. 08.04.2026

   Should we keep an eye on the upside for European currencies that have risen against the U.S. dollar?

9. 07.04.2026

   Market participants may be wary of further downside potential for the U.S. dollar, which has weakened amid concerns over the situation in Iran

10. 06.04.2026

    Investors should be wary of sudden spikes in volatility while major markets are closed