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Ekonomické zprávy
17.09.2024

European session review: USD depreciates as Fed’s two-day meeting starts

TimeCountryEventPeriodPrevious valueForecastActual
09:00EurozoneZEW Economic SentimentSeptember17.916.39.3
09:00GermanyZEW Survey - Economic SentimentSeptember19.217.13.6


USD weakened against most of its major counterparts in the European session on Tuesday as investors prepared for the start of the Federal Reserve’s two-day policy meeting later in the day, which is expected to deliver an outsized interest rate cut. 

The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, slipped 0.09% from the previous close to 100.67.

The U.S. central bank is mostly expected to announce a 50-basis-point interest-rate decrease when it unveils the outcomes of its September meeting tomorrow at 18:00 GMT. This would be the first rate cut by the Fed since March 2020. According to CME FedWatch, markets now see a 65.0% probability of such a move by the Fed on Wednesday, compared to 62.0% yesterday and 34.0% one week ago. 

Bets on an aggressive rate cut at this week’s Fed meeting increased following a weekend article by The Wall Street Journal's (WSJ) Greg Ip arguing for a bigger rate reduction and a Monday Bloomberg Opinion column from former New York Fed President Bill Dudley calling for a 50-basis-points decrease in interest rates. 

Another point of investors’ interest is today’s release of the U.S. August data on retail sales and industrial production. Economists expect the data to show a 0.2% MoM dip in retail sales and a 0.2% MoM gain in industrial production.

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