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Dollar Strength Pressures Major Currencies Ahead of Fed Decision | 16th September, 2026

Dollar Strength Builds Global FX markets remain focused on the Federal Reserve’s interest-rate decision as the US Dollar holds near multi-week highs against major currencies. Markets are heavily pricing a 25-basis-point Fed hike, with Treasury yields elevated and investors closely watching the central bank’s guidance on the path of future policy. Sterling, the Euro and commodity-linked currencies such as the Australian and New Zealand Dollars remain under pressure as traders position for potential further Dollar strength. GBP/USD Forecast Current Price and Context GBP/USD has slipped below 1.3500 as traders await UK CPI data and the Federal Reserve’s policy decision. Sterling remains vulnerable to broad US Dollar strength, while elevated energy prices are also an important consideration for the UK inflation outlook. Key Drivers • Geopolitical Risks: Elevated energy prices and Middle East tensions could increase inflation pressure and complicate the UK monetary-policy outlook. • US Economic Data: Stronger US economic and inflation signals could reinforce expectations for tighter Fed policy and support the Dollar. • FOMC Outcome: A hawkish Fed decision or guidance could place additional pressure on GBP/USD. • Trade Policy: Changes in global trade conditions could affect UK growth expectations and Sterling sentiment. • Monetary Policy: The policy-rate differential between the Fed and Bank of England remains an important driver for GBP/USD. Technical Outlook • Trend: Bearish below 1.3500. • Resistance: 1.3500 / 1.3550. • Support: 1.3450 / 1.3400. • Forecast: A sustained break below 1.3450 could expose further downside, while a recovery above 1.3500 would reduce near-term bearish pressure. Sentiment and Catalysts • Market Sentiment: Bearish to cautious. • Catalysts: UK CPI, Fed decision, Fed guidance, Treasury yields and energy prices. EUR/USD Forecast Current Price and Context EUR/USD remains near a one-month low as Dollar bulls maintain control ahead of the Fed decision. The pair continues to reflect widening expectations around US monetary policy, with higher US yields providing additional support for the Dollar. Key Drivers • Geopolitical Risks: Energy-market volatility and Middle East tensions continue to influence European inflation and growth expectations. • US Economic Data: Strong US data could reinforce expectations for additional Fed tightening. • FOMC Outcome: A hawkish policy statement could extend Dollar gains and weigh on EUR/USD. • Trade Policy: Changes in global trade conditions could influence European export expectations and risk sentiment. • Monetary Policy: The relative path of Fed and ECB policy remains central to the EUR/USD outlook. Technical Outlook • Trend: Bearish below 1.1750. • Resistance: 1.1750 / 1.1800. • Support: 1.1700 / 1.1650. • Forecast: Continued trading below 1.1700 could expose the next support zone, while a recovery above 1.1750 would signal improving near-term momentum. Sentiment and Catalysts • Market Sentiment: Bearish. • Catalysts: Fed decision, Fed projections, US yields, European economic data and geopolitical developments. AUD/USD Forecast Current Price and Context AUD/USD has weakened below 0.7150 as markets position ahead of the Federal Reserve decision. The Australian Dollar is particularly sensitive to changes in global risk sentiment, US yields and commodity-market conditions, leaving the pair vulnerable while the Dollar remains firm. Key Drivers • Geopolitical Risks: Energy-market disruptions and geopolitical uncertainty could weigh on risk-sensitive currencies. • US Economic Data: Strong US data and higher yields could continue supporting the Dollar. • FOMC Outcome: A hawkish Fed could increase downside pressure on AUD/USD. • Trade Policy: Australian export exposure and global trade conditions remain important for the currency. • Monetary Policy: Interest-rate expectations between the RBA and Fed will influence capital flows. Technical Outlook • Trend: Bearish below 0.7150. • Resistance: 0.7150 / 0.7200. • Support: 0.7100 / 0.7050. • Forecast: A sustained break below 0.7100 could open the way toward 0.7050, while a move back above 0.7150 would ease immediate downside pressure. Sentiment and Catalysts • Market Sentiment: Bearish to cautious. • Catalysts: Fed decision, US Treasury yields, global risk sentiment, commodities and Chinese economic developments. NZD/USD Forecast Current Price and Context NZD/USD is under pressure after the New Zealand Dollar weakened following news that RBNZ Assistant Governor Karen Silk will leave her position in December. The move comes as the New Zealand central bank maintains a tightening bias after raising the OCR by 25 basis points to 2.75% earlier this month. Key Drivers • Geopolitical Risks: Higher energy prices and global uncertainty remain negative factors for risk-sensitive currencies. • US Economic Data: Strong US data and elevated Treasury yields can increase demand for the Dollar. • FOMC Outcome: A hawkish Fed outcome could extend pressure on NZD/USD. • Trade Policy: New Zealand’s export exposure makes global trade and Chinese demand important currency drivers. • Monetary Policy: The RBNZ has already raised its OCR to 2.75%, while future policy remains dependent on inflation and economic conditions. Technical Outlook • Trend: Bearish below 0.5850. • Resistance: 0.5850 / 0.5900. • Support: 0.5780 / 0.5750. • Forecast: A break below 0.5780 could extend the bearish move toward 0.5750, while recovery above 0.5850 would improve the near-term technical picture. Sentiment and Catalysts • Market Sentiment: Bearish. • Catalysts: Fed decision, RBNZ policy expectations, US yields, energy prices and global risk sentiment. US Dollar Index (DXY) Forecast Current Price and Context The US Dollar Index continues to gain ground ahead of the Federal Reserve decision, trading near multi-week highs as markets increasingly price a US rate hike. Current market pricing places the probability of a 25-basis-point increase at around 90% or higher, making the Fed’s forward guidance particularly important for the next Dollar move. Key Drivers • Geopolitical Risks: Energy and geopolitical uncertainty are contributing to inflation concerns and supporting demand for the Dollar. • US Economic Data: Elevated inflation and higher Treasury yields are strengthening expectations for tighter US monetary policy. • FOMC Outcome: The rate decision, economic projections and Fed Chair’s guidance will be the primary catalysts. • Trade Policy: Global trade uncertainty can support safe-haven demand for the US Dollar. • Monetary Policy: Expectations for a potentially broader US tightening cycle remain a major Dollar driver. Technical Outlook • Trend: Bullish above 99.00. • Resistance: 100.00 / 100.50. • Support: 99.00 / 98.50. • Forecast: Holding above 99.00 keeps the bullish structure intact, with a break above 100.00 potentially opening the way toward 100.50. Sentiment and Catalysts • Market Sentiment: Bullish. • Catalysts: Fed rate decision, Fed guidance, Treasury yields, inflation expectations and geopolitical developments. Wrap-Up The Federal Reserve decision is the dominant catalyst for global FX markets, with the US Dollar holding firm as traders price a potential rate hike and assess the likelihood of further tightening. GBP/USD, EUR/USD, AUD/USD and NZD/USD remain vulnerable while the Dollar stays supported by elevated yields and shifting policy expectations. The Fed’s forward guidance will be particularly important, as a more hawkish or dovish outlook could determine whether the current Dollar strength extends or reverses. Ready to trade global markets with confidence? Join Moneta Markets today and unlock 1000+ instruments, ultra-fast execution, ECN spreads from 0.0 pips, and more! Start now with Moneta Markets!

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Publication date:

2026-09-16 09:08:31 (GMT)

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