USD Just Shy Of Post-FOMC Highs, Raft Of Central Bank Meetings Eyed

The broader BBDXY operates a little shy of September’s multi-month highs, with the feedthrough from yesterday’s FOMC decision (dot adjustments at the hawkish end of expectations, with less rate cuts priced in ’24 & ’25 and Powell noting that r* could potentially be higher) remaining evident.

• The Antipodeans struggle, with defensive moves in equities overpowering any impact from the firmer than expected NZ GDP data (which included positive revisions)
• USD/JPY stuck to a tight Y148.19-46 range in Tokyo, registering a fresh ’23 high before moving back to unchanged. Equity weakness would have provided some background support for the JPY after the initial pressure derived from wider U.S./Japan yield differentials post-Fed.
• Cable has printed at the lowest level seen since April, operating in the low $1.23 area. The FOMC added pressure after local CPI data meant that participants started to seriously question the prospect of another rate hike come the end of today’s BoE decision.
• Eyes will be on central bank decisions from the UK (seen as a much closer call after yesterday’s CPI data), Norway, Sweden & Switzerland. The Scandinavian and Swiss central banks are expected to deliver 25bp rate hikes, so focus there should fall on guidance re: further policy action.
• Comments from ECB’s Schnabel, Lane and Nagel will also cross (Lane is due after market close).
• Weekly jobless claims, the Philly Fed survey and existing home sales data is due out of the U.S.