Forex Today: US Dollar stands tall as focus remains on central bank commentary

Here is what you need to know on Thursday, September 24:

The US Dollar (USD) stays resilient against its peers early Thursday, with the USD Index holding steady above 101.00 after rising more than 0.5% and registering its highest daily closing in two months on Wednesday. In the second half of the day, weekly Initial Jobless Claims data will be featured in the US economic calendar. Market participants will continue to scrutinize comments from central bank policymakers as well.

US Dollar Price This week

The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Australian Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.84%	1.09%	1.00%	0.84%	1.13%	0.76%	0.13%
EUR	-0.84%		0.27%	0.16%	-0.00%	0.29%	-0.06%	-0.69%
GBP	-1.09%	-0.27%		-0.21%	-0.27%	0.02%	-0.33%	-0.96%
JPY	-1.00%	-0.16%	0.21%		-0.13%	0.12%	-0.22%	-0.84%
CAD	-0.84%	0.00%	0.27%	0.13%		0.35%	-0.09%	-0.69%
AUD	-1.13%	-0.29%	-0.02%	-0.12%	-0.35%		-0.35%	-1.04%
NZD	-0.76%	0.06%	0.33%	0.22%	0.09%	0.35%		-0.62%
CHF	-0.13%	0.69%	0.96%	0.84%	0.69%	1.04%	0.62%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

Análisis de TMGM: noticias de mercados financieros, calendario económico e información del mercado

The USD gathered strength midweek on the back off upbeat data and hawkish remarks from Federal Reserve (Fed) Governor Michael Barr. The benchmark 10-year US Treasury bond yield rose more than 3% on the day and climbed to its highest level since July 2007 above 5.1% during the American trading hours and further supported the USD.

S&P Global Composite Purchasing Managers' Index (PMI) in the US rose to 58.4 in September's flash estimate from 56 in August, showing a further expansion of the private sector's business activity at an accelerating pace. In this period, the Manufacturing PMI climbed to 57 from 53.9, while the Services PMI improved to 58.7 from 56.5.

Fed’s Barr delivered a distinctly hawkish message on Wednesday, with an FXS Speechtracker score of 8/10, above the 7/10 historical average and signaling a stronger tightening bias relative to the established baseline. The assertion that “further rate hikes [are] likely needed” and that risks to achieving 2% inflation have increased, while labor market risks have receded, underscores a clear prioritization of inflation control over employment concerns. The admission that the Fed was “out of position” and needed to “recalibrate” policy, combined with comments that inflation is not clearly trending toward target amid strong growth and a solid labor market, reinforces expectations for additional policy tightening and supports the Dollar.

US Dollar rally looks stretched as markets eye China summit and Fed speakers

ING’s FX strategists note that the Dollar “jumped yesterday, with DXY breaking above 101.0,” as “very strong US PMIs, higher oil prices and soft risk sentiment have all contributed to the bullish narrative.” However, they caution that “the move is starting to look stretched relative to fundamentals,” suggesting scope for consolidation if the data pulse cools or risk appetite stabilises.

Looking ahead, ING highlight that “today, focus will be on the summit between President Trump and Chinese leader Xi Jinping.” They point out “a history of Trump striking a more conciliatory tone in face-to-face events,” and add that “Scott Bessent has already announced an extension of the trade truce by two months,” which could help temper immediate trade-related volatility.

Earlier in the day, the data from Australia showed that the Unemployment Rate edged higher to 4.6% in August from 4.5% in July. In this period, Full-Time Employment declined by 6.3K, but the overall Employment Change was +39.5K. AUD/USD struggles to stage a rebound following Wednesday's sharp decline and trades below 0.7050 in the European session on Thursday.

The Swiss National Bank (SNB) announced on Thursday that it left the policy rate unchanged at 0%, as anticipated. In the policy statement, the SNB noted that the trade policy environment and exchange rate developments continue to be sources of uncertainty, and projected that inflation will continue to rise somewhat in the fourth quarter, before declining again over the course of 2027. USD/CHF shows no reaction to the SNB decision and holds above 0.8250.

EUR/USD registered losses for the third consecutive day on Wednesday and touched its lowest level in two months at 1.1370. The pair holds steady below 1.1400 early Thursday but struggles to gather recovery momentum. IFO business sentiment data from Germany will be featured in the European economic calendar.

GBP/USD lost nearly 0.8% on Wednesday, pressured by the persistent USD strength. The pair fluctuates in a tight channel at around 1.3250 in the European session on Thursday.

Rising US Treasury bond yields weighed heavily on Gold on Wednesday, with XAU/USD losing more than 1.5% on a daily basis. The precious metal finds it difficult to gain traction early Thursday and moves sideways below $4,300.

Fed FAQs

What does the Federal Reserve do, how does it impact the US Dollar?

Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.

How often does the Fed hold monetary policy meetings?

The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.

What is Quantitative Easing (QE) and how does it impact USD?

In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.

What is Quantitative Tightening (QT) and how does it impact the US Dollar?

Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.

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