Major FX was relatively subdued during the session here today, the obvious reason being traders await the outcome of the Federal Open Market Committee (FOMC) monetary policy meeting. There are links to previews in the points to posts above, and links to further previews in those posts. TL;DR is that a 75bp rate hike is widely expected, taking the target range of 3.0% to 3.25%. That would also put the Fed in restrictive policy. Also in focus will be the dot plot and central tendencies. Where does the Fed see the terminal rate to be and are lower rates seen in 2023 or later? More on the dot plot is here:

While the majors tracked sideways not so the yuan. It continued its slide. China’s economy is being pounded by ongoing rolling lockdowns due to its Zero Covid policy, a collapsed debt-ridden property market and, until recently, power shortages. The yuan is bearing the brunt. Offshore yuan fell again today to USD/CNY circa 7.05.

Ahead of the FOMC Russian President Putin is speaking, at 8am in Moscow.

After the FOMC, Thursday Asia time, is the Bank of Japan policy statement. The Bank was in buying JGBs aggressively today, trying to drive down higher yields. This is not a sign of a Bank about to withdraw from super-easy policy any time soon.

usdcnh wrap 21 September 2022