Ella 
Here’s what you need to know on Wednesday, September 20:
Sterling weakened against its major rivals in early trade on Wednesday as investors reacted to weaker-than-expected UK inflation data for August. Later in the day, the Federal Reserve (Fed) will announce its interest rate decision and release its revised Summary of Economic Projections (SEP) – the so-called dot plot. Market participants will be keeping a close eye on New Zealand’s second-quarter gross domestic product data early in the Asian session.
The Office for National Statistics reported on Wednesday that Britain’s annual inflation rate, measured by changes in the consumer price index (CPI), fell to 6.7% in August from 6.8% in July. The figure was below market expectations of 7.1%. Other details in the report showed core CPI inflation fell to 6.2% from 6.9% in the same period, while the retail price index rose 9.1%, compared with analysts’ expectations of 9.3%. GBP/USD fell to its weakest levels since late May, trading below 1.2350 in immediate reaction to the inflation data. EUR/GBP jumped to a six-week high above 0.8650 and GBP/JPY fell more than 50 points to fall below 183.00, reflecting the broad selling pressure surrounding the pound.
EUR/USD climbed above 1.0700 during European trading on Tuesday, but ended the day below that level. The pair was trading up and down within a narrow channel early on Wednesday.
USD/JPY edged higher on Tuesday, continuing its approach towards 148.00 during Wednesday’s Asian session.
NZD/USD posted a second straight day of gains on Tuesday, pushing as high as the 0.5950 area in early Wednesday trading. New Zealand’s economy is expected to grow at an annual rate of 1.2% in the second quarter, down from 2.2% in the first quarter.
USD/CAD fell below 1.3400 for the first time in more than a month on Tuesday after Statistics Canada reported full-year CPI growth of 4% in August, beating consensus expectations of 3.8%. However, lower crude oil prices capped gains for the Canadian dollar, with the pair erasing most of the day’s gains in late U.S. trading hours. At press time, the pair was trading sideways around 1.3450.
Gold prices continued to move higher on Tuesday following Monday’s bullish action, but struggled to build bullish momentum. Gold/USD is in a consolidation phase just above $1,930 as the benchmark 10-year Treasury yield remains above 4.3% ahead of the Fed meeting.
