Daily Market Report
09/14/2026
EUR/USD ranged in the mid to the high 1.15s overnight. The Euro (EUR) accelerates its downtrend against the US Dollar (USD) on Monday, weighed by risk-averse markets, with Oil prices above the $100 level and a stronger US Dollar, amid rising hopes of a Federal Reserve (Fed) rate hike on Wednesday. The EUR/USD pair is trading at fresh monthly lows below 1.1550 at the time of writing, after extending the reversal from 1.1650 highs last week.
The US Dollar, on the other hand, is drawing some support from risk-aversion and higher hopes that the Fed will finally hike the Federal Funds Rate by 25 basis points to the 3.75%-4.00% range next Wednesday. US Consumer Price Index (CPI) figures released on Friday showed that core inflation rose in August at its fastest pace in the last two months, forcing the central bank to tighten its monetary policy or risk a credibility crisis.
Analysts warn that if the Fed “does not take action this week to address upside inflation risks, it could trigger a sharp sell-off for the US Dollar and long-term US Treasuries by undermining confidence in their willingness to get on top of inflation.” They argue that this uncertainty “could be one reason why US Dollar gains have only been limited so far on the back of the hawkish repricing of Fed rate hike expectations.
The GBP/USD pair comes under heavy selling at the start of a new week and drops to the lower end of its monthly range, near the 1.3480 region during the first half of the European session. The intraday decline is sponsored by a broadly firmer US Dollar (USD), though bearish traders might refrain from placing aggressive bets ahead of key central bank events this week.
The US Federal Reserve (Fed) is scheduled to announce its decision at the end of a two-day policy meeting on Wednesday, which will be followed by the Bank of England (BoE) meeting on Thursday. The market focus, meanwhile, would be on central banks’ policy outlook, which, in turn, would provide some meaningful impetus to the GBP/USD pair and help in determining the next leg of a directional move.
USD/JPY rebounds after posting modest losses the previous day, trading around 154.60 during European hours on Monday. The pair appreciates as the US Dollar (USD) gains amid rising oil prices and growing Federal Reserve (Fed) rate hike bets.
The upside of the USD/JPY cross could be restrained as the Japanese Yen (JPY) could find tailwinds from a shifting market landscape, driven by expectations of faster Bank of Japan (BoJ) policy tightening, the unravelling of carry trades, and increased capital repatriation by domestic players. Markets anticipate the central bank will raise borrowing costs to 1.25% to address lingering price pressures, pushing rates to a peak not seen in over three decades.
Source: FX Street