US dollar tumbles ahead of drama-packed Fed decision
The US dollar closed at the lowest level since 2022 overnight, ahead of one of the most closely watched Federal Reserve decisions in years.
The move pushed the Aussie to its highest level since November 2024, the kiwi neared 0.6000, and USD/SGD and USD/CNH fell to multi-month lows.
Markets are bracing for tonight’s Fed decision, with most expecting a 25bps rate cut, although some are forecasting a more aggressive 50bps move.
The Fed remains divided, with some members concerned about the impact of tariffs and others backing President Donald Trump’s calls for sharp rate cuts.
The last meeting saw the most public dissent in over 30 years, with Governor Christopher Waller and Vice Chair Michelle Bowman calling for cuts despite the Fed holding steady. It marked the largest number of dissenting votes since 1993.
The decision is due at 4.00am AEST.
AUD/USD hits ten-month high with Miran in the mix
The US Senate narrowly confirmed Stephen Miran to the Federal Reserve Board on Monday, with a 48–47 vote. His arrival comes just ahead of Thursday’s key policy meeting, where expectations are building for the Fed to lower rates for the first time this year.
Miran replaces Adriana Kugler, who stepped down in August. With Trump pushing for a larger cut, all eyes are on whether Miran supports a more aggressive move.
Meanwhile, the Aussie is surging. AUD/USD broke through the 0.6600 level, hitting a ten-month high. Traders are now eyeing 0.6800 as the next milestone.
However, momentum may be cooling. The pair sits at the top of its recent trading range, and technical indicators suggest it’s nearing overbought territory. This week’s Fed decision could either fuel the rally—or rein it in.
TikTok deal talk lifts sentiment, USD/CNH drops
President Donald Trump signaled progress on a potential TikTok deal with China, ahead of a scheduled call with President Xi Jinping on Friday.
US Treasury Secretary Scott Bessent hinted at a framework agreement during trade talks in Madrid, suggesting the app could shift to US-controlled ownership. Oracle—already hosting US TikTok data—may take a stake.
TikTok is currently owned by Beijing-based ByteDance. While the framework appears to be in place, Bessent said the September 17 deadline could be extended by 90 days to finalize terms.
In currency moves, USD/CNH slipped below key levels, trading under the 21-day and 50-day averages of 7.1372 and 7.1580. With momentum fading, the pair looks set to stay range-bound unless fresh headlines shake things up.
Aussie at highs ahead of Fed
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 15 – 19 September
All times AEST
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
