Here is what you need to know on Friday, September 13:
Following the bullish action seen in the first half of the week, the US Dollar (USD) Index turned south on Thursday and erased all of its weekly gains. The index struggles to gain traction early Friday and edges lower toward 101.00. Eurostat will release Industrial Production data for July and the US economic docket will feature August Export Price Index and Import Price Index data, alongside the University of Michigan's Consumer Sentiment Survey for September.
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 weakest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.08% | 0.02% | -0.82% | 0.12% | -0.66% | -0.06% | 0.55% | |
| EUR | -0.08% | -0.12% | -0.88% | 0.04% | -0.78% | -0.12% | 0.44% | |
| GBP | -0.02% | 0.12% | -0.87% | 0.16% | -0.67% | -0.03% | 0.56% | |
| JPY | 0.82% | 0.88% | 0.87% | 0.96% | 0.19% | 0.77% | 1.57% | |
| CAD | -0.12% | -0.04% | -0.16% | -0.96% | -0.74% | -0.19% | 0.59% | |
| AUD | 0.66% | 0.78% | 0.67% | -0.19% | 0.74% | 0.64% | 1.21% | |
| NZD | 0.06% | 0.12% | 0.03% | -0.77% | 0.19% | -0.64% | 0.59% | |
| CHF | -0.55% | -0.44% | -0.56% | -1.57% | -0.59% | -1.21% | -0.59% |
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).
Soft producer inflation data from the US revived expectations for a large Federal Reserve (Fed) rate cut at the policy meeting next week, causing the USD to weaken against its major rivals. On a yearly basis, the Producer Price Index (PPI) rose 1.7% in August, down from 2.1% in July and below the market expectation of 1.8%. Additionally, the improving risk mood put additional weight on the USD's shoulders. Early Friday, US stock index futures trade flat and the 10-year US Treasury bond yield stays in negative territory at around 3.65%.
The European Central Bank (ECB) announced on Thursday that it lowered the deposit facility rate, also known as the benchmark interest rate, by 25 basis points (bps) to 3.5% as expected. In the post-meeting press conference, ECB President Christine Lagarde refrained from hinting on whether they are planning to ease policy further in the near term. EUR/USD gathered bullish momentum in the second half of the day on Thursday and rose more than 0.5%, snapping a four-day losing streak.
GBP/USD benefited from improving risk mood and the renewed USD weakness on Thursday and gained over 0.6%. The pair stays relatively quiet and trades in a tight channel above 1.3100 in the European morning.
Fitch Ratings said in its latest report that they expect the Bank of Japan’s (BoJ) to hike rates to 0.5% by the end of 2024, 0.75% in 2025 and 1% by end-2026. After closing the day marginally lower on Thursday, USD/JPY continues to stretch lower in the European morning and was last seen losing 0.5% on the day at 141.10.
Gold surged higher in the second half of the day on Thursday and reached a new record-high of $2,570 during the Asian trading hours on Friday. Although XAU/USD retreated slightly, it holds above $2,560 and remains on track to post strong weekly gains.
Interest rates FAQs
Interest rates are charged by financial institutions on loans to borrowers and are paid as interest to savers and depositors. They are influenced by base lending rates, which are set by central banks in response to changes in the economy. Central banks normally have a mandate to ensure price stability, which in most cases means targeting a core inflation rate of around 2%. If inflation falls below target the central bank may cut base lending rates, with a view to stimulating lending and boosting the economy. If inflation rises substantially above 2% it normally results in the central bank raising base lending rates in an attempt to lower inflation.
Higher interest rates generally help strengthen a country’s currency as they make it a more attractive place for global investors to park their money.
Higher interest rates overall weigh on the price of Gold because they increase the opportunity cost of holding Gold instead of investing in an interest-bearing asset or placing cash in the bank. If interest rates are high that usually pushes up the price of the US Dollar (USD), and since Gold is priced in Dollars, this has the effect of lowering the price of Gold.
The Fed funds rate is the overnight rate at which US banks lend to each other. It is the oft-quoted headline rate set by the Federal Reserve at its FOMC meetings. It is set as a range, for example 4.75%-5.00%, though the upper limit (in that case 5.00%) is the quoted figure. Market expectations for future Fed funds rate are tracked by the CME FedWatch tool, which shapes how many financial markets behave in anticipation of future Federal Reserve monetary policy decisions.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD extends recovery beyond 1.0400 amid Wall Street's turnaround
EUR/USD extends its recovery beyond 1.0400, helped by the better performance of Wall Street and softer-than-anticipated United States PCE inflation. Profit-taking ahead of the winter holidays also takes its toll.
GBP/USD nears 1.2600 on renewed USD weakness
GBP/USD extends its rebound from multi-month lows and approaches 1.2600. The US Dollar stays on the back foot after softer-than-expected PCE inflation data, helping the pair edge higher. Nevertheless, GBP/USD remains on track to end the week in negative territory.
Gold rises above $2,620 as US yields edge lower
Gold extends its daily rebound and trades above $2,620 on Friday. The benchmark 10-year US Treasury bond yield declines toward 4.5% following the PCE inflation data for November, helping XAU/USD stretch higher in the American session.
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers
Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.