09/26 Wednesday | 18:00 GMT | USD Federal Reserve Rate Decision and Press Conference

The Federal Reserve will raise rates when it meets on Wednesday, with Fed funds futures pricing in a 100% chance of a 25-bps rate hike. The glide path of interest rates have steepened in recent weeks, with investors now pricing in a 77% chance of a fourth and final hike this year in December. The already high expectations for further tightening mean that a rate hike alone won’t be enough to help the US Dollar. Accordingly, attention will be on the updated Summary of Economic Projections, which are due to include 2021 forecasts for the first time. For the US Dollar to rally, the new projections will need to show that the Fed intends on continuing to gradually raise rates through 2019; currently, Fed funds futures are pricing the pace of hikes to slow down to just two in 2019 (June and December).

Pairs to Watch: DXY Index, EUR/USD, GBP/USD, USD/JPY, Gold

09/26 Wednesday | 21:00 GMT | NZD Reserve Bank of New Zealand Rate Decision

As has been the case for the past several months, with overnight index swaps pricing in less than a 5% chance of a move at another policy meeting, the way the Reserve Bank of New Zealand policymakers have the potential to hit the Kiwi is via commentary on the exchange rate. Furthermore, overnight index swaps are not pricing in any rate move within the next six months; there is a slight bias towards a 25-bps cut over the period, but nothing significant at present time. The Q2’18 inflation report showed that price pressures remain below the RBNZ’s +2% target, having come in at +1.5% y/y. For now, the RBNZ is seemingly relegated to the sidelines; but verbal rhetoric remains their most likely tool to be used in the near-term, if at all.

Pairs to Watch: AUD/NZD, NZD/JPY, NZD/USD

09/27 Thursday | 12:30 GMT | USD Durable Goods Orders (AUG P)

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