Dollar Strength Drives Euro Lower Following Fed Rate Decision

The standout move across the benchmark board on Wednesday, September 16 was the Euro, several times the size of its usual day. On Wednesday, the Federal Reserve raised its benchmark interest rate by 25 basis points to a target range of 3.75% to 4.00% and stated that inflation remained elevated. Projections from the meeting showed sixteen of eighteen policymakers projected at least one more rate hike. Earlier in the session, rising energy prices and expectations of policy tightening had supported the U.S. currency, and the afternoon decision lifted the dollar against major currency peers, leaving the euro -0.7% against the dollar.

Precious metals moved further after regular trading concluded. By 10:35 am New York, round-the-clock trading showed silver +1.5% and gold +0.7%.

Crypto assets experienced a quiet session, with Bitcoin +0.3% and Ethereum +0.3%.

What to Watch

Several major central bank policy meetings and economic releases are scheduled across global markets over the remainder of the week.

On Thursday, the Bank of England will publish its September monetary policy decision and meeting minutes. In the United States, the Census Bureau is scheduled to release new residential construction data at 8:30 a.m. Eastern, covering housing starts, building permits, and completions. At the same hour, the Federal Reserve Bank of Philadelphia will release its September Manufacturing Business Outlook Survey on regional factory activity.

On Friday, the Bank of Japan will conclude its monetary policy meeting and release its policy statement, followed by a press conference from the governor at 3:30 p.m. local time. In the United States, the Conference Board will publish its Leading Economic Index at 10:00 a.m. Eastern.