Forex Today: Dollar stronger but within range

What you need to take care of on Wednesday, September 21:

The American dollar advanced on Tuesday as the market’s mood soured. Higher US government bond yields backed the greenback throughout the day, as the 2-year Treasury yield soared to its highest in fifteen years ahead of the US Federal Reserve announcement.

The yield on the 10-year Treasury note is now at 3.56% after hitting 3.604%, while the 2-year yield peaked at 3.992%, now hovering at around 3.96%.

Cautious, however, limited the dollar’s gains. Market players are concerned the US Federal Reserve could hike rates by more than 75 bps given stubbornly high inflation. The central bank will present fresh Economic Projections, with the focus on growth and inflation expectations.

The US Federal Reserve will be the first but not the only central bank to announce its monetary policy decision in the next 48 hours. The Bank of Japan, the Switzerland National Bank, and the Bank of England are the most relevant to making decisions following the Fed.

The EUR/USD pair was unable to retain parity and settled at around 0.9970. The GBP/USD pair trades around 1.1380. Commodity-linked currencies were among the worst performers, down against the dollar. USD/CAD trades at 1.3360, while AUD/USD is down to 0.6690. The USD/JPY pair holds ground around 143.60.

Spot gold shed some ground now at $1,664 a troy ounce. Crude oil prices also eased, with WTI now at $84 per barrel.

Asian shares managed to post gains, but European indexes closed in the red. Wall Street trimmed weekly gains and also settled in the red.

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