Ella 
Here’s what you need to know on Thursday, September 14th:
Sentiment remained high as Asian shares rose after all-important U.S. consumer price index (CPI) data solidified bets that the Federal Reserve would pause policy. U.S. S&P 500 futures, a risk barometer, rose nearly 0.30% that day.
On Wednesday, the U.S. inflation index rose at an annual rate of 3.7% in August, compared with expectations for a 3.6% rise. In August, CPI increased by 0.6% on a monthly basis, the largest monthly increase since 2023, but it was in line with market consensus. Core CPI increased by 0.3% monthly and 4.3% annually, compared with expectations of 0.2% and 4.3% respectively.
Money markets continue to believe the Fed will pause on raising interest rates next week, while the probability of a November rate hike remains around 40%, according to CME Group’s FedWatch Tool. The Fed’s dovish outlook remains unchanged, which appears to have weighed on the dollar and Treasury yields during the European session.
Within the G10 FX basket, the Australian dollar was the strongest, followed by the Japanese yen, while the Canadian dollar was the weakest during European trading hours.
AUD/USD is consolidating strong gains led by Australian jobs data around 0.6435. Data released by the Australian Bureau of Statistics (ABS) on Thursday showed that the Australian economy added 64,900 jobs compared with the previous month, driven by part-time work. The unemployment rate held steady at 3.7%, in line with expectations.
USD/CAD is still retreating below 1.3550 despite a pause in oil price gains. WTI stabilized near ten-month highs of $89.
USD/JPY was under pressure at 147.00, with comments from Japan’s new Economy Minister Yoshitaka Shindo providing support for the yen. Shindo said he “will mobilize all possible policy measures to support the economy.”
Before the announcement of the ECB interest rate decision, EUR/USD maintained a recovery trend near 1.0750. The ECB is widely expected to hold steady later in the day. The latest economic forecasts and speeches from President Christine Lagarde will be key in hinting at the ECB’s future policy path and a clear direction for the euro. Citing sources, Reuters reported on Wednesday that the European Central Bank’s quarterly forecast would put inflation at 3.0% in 2024.
GBP/USD is hovering around 1.2500 against the backdrop of UK economic woes and broad dollar weakness. The ECB decision could have a spillover effect on GBP/EUR.
Gold prices are hovering at three-week lows near $1,905, with sellers awaiting a sustained break above the $1,900 threshold for further losses.
