DXY remains weak ahead of Fed rate announcement

Key Movers

In the Eurozone, the EUR/USD pair held onto gains above 1.1100 as the greenback remained under pressure ahead of the Fed’s policy decision. The pair remained firm at the USD’s expense as the euro underperformed against other major peers so far today. The euro faced pressure amid growing uncertainty over the European Central Bank’s (ECB) interest-rate path.

The pound made minor gains this morning, hitting a three-week high of 1.3254. However, the GBP failed to gain too much traction as markets prepared for the Fed’s rate announcement this afternoon.

The USD/JPY pair dropped below 142 in Wednesday’s European session. The asset faced selling pressure after recovering to near 142.47 as the greenback slumped ahead of the Fed announcement.

The CAD remained under pressure as the Bank of Canada (BoC) is expected to extend its monetary policy further. The BoC has already cut interest rates by 75 basis points (bps) this year to 4.25%. Market expectations for more BoC rate cuts rose after Tuesday’s Consumer Price Index (CPI) data for August, which measures the average change in prices paid by consumers for a basket of goods and services, came in softer-than-expected. The Canadian CPI report showed that headline inflation returned to the target of 2%. The Bank of Canada’s (BoC) core CPI measure decelerated further to 1.5% from 1.7% in July.