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USD/JPY Price Forecast: Likely to Trade Sideways Ahead of Fed-BoJ Meetings
Confirmed
In Short: The US Dollar Index trades higher as bets for a hawkish Federal Reserve decision strengthen, while investors await the Bank of Japan's policy announcement.
The US Dollar Index (DXY) has risen 0.35% to near 99.43, reflecting increased bets for a hawkish Federal Reserve decision at their upcoming meeting, according to FXStreet. This comes as the US Dollar strengthens amid rising inflation reports, including the August US Consumer Price Index (CPI) which matched expectations with a 0.4% MoM increase and a 3.4% annual rise.
Meanwhile, investors are also keeping an eye on the Bank of Japan’s (BoJ) policy decision on Friday, where it is expected to raise interest rates. However, the initial reaction to these expectations waned, as money markets have priced in a 91% chance of a rate hike by the Federal Reserve at next week’s meeting, according to Prime Terminal.
FXStreet reports that Gold prices are drifting higher but struggling to break above $4,400, with sellers stepping in around that level. This suggests that Gold’s faith will fall on next week’s Federal Reserve monetary policy decision and Fed Chair Kevin Warsh's press conference.
According to Joanne Hsu, the survey’s director, consumers anticipate greater pressures on their pocketbooks due to a resurgence in fuel prices and trade tensions, with inflation expectations rising to 4.6% in one year and 3.4% over five years. Bullion prices are advancing steadily, capitalizing on falling US bond yields during the session.
What's confirmed
- The US Dollar Index (DXY) has risen 0.35% to near 99.43, reflecting increased bets for a hawkish Federal Reserve decision at their upcoming meeting, according to FXStreet. This comes as the US Dollar strengthens amid rising inflation reports, including the August US Consumer Price Index (CPI) which matched expectations with a 0.4% MoM increase and a 3.4% annual rise.
- Meanwhile, investors are also keeping an eye on the Bank of Japan’s (BoJ) policy decision on Friday, where it is expected to raise interest rates. However, the initial reaction to these expectations waned, as money markets have priced in a 91% chance of a rate hike by the Federal Reserve at next week’s meeting, according to Prime Terminal.
- FXStreet reports that Gold prices are drifting higher but struggling to break above $4,400, with sellers stepping in around that level. This suggests that Gold’s faith will fall on next week’s Federal Reserve monetary policy decision and Fed Chair Kevin Warsh's press conference.
- According to Joanne Hsu, the survey’s director, consumers anticipate greater pressures on their pocketbooks due to a resurgence in fuel prices and trade tensions, with inflation expectations rising to 4.6% in one year and 3.4% over five years. Bullion prices are advancing steadily, capitalizing on falling US bond yields during the session.
What's still developing
- That remains lower than the rate of rising prices in general, but the property portal has forecast annual rent rises among privately rented homes will hit 4% or 5% by the end of the year.
- Over the weekend, US President Trump said while speaking to reporters at the Irish Open golf tournament that he did not know whether Federal Reserve (Fed) policymakers will raise interest rates at their meeting this week.
- Once cleared, this exposes key psychological levels at $4,450 and $4,500, ahead of the 200-day SMA at $4,538.
- Core CPI went up 0.3%, slightly above the forecast of 0.2%; over the past year, it remained at 2.4%, down from July and in line with estimates.
- The index fell from 51.7 to 47.8, missing forecasts of 51.
- Near-Term GBP/EUR Forecast: ECB Decision Takes Centre Stage Looking ahead, attention is firmly on the ECB’s interest rate decision on Thursday.