🛢️ Brent above $100 and the Iran war have put inflation back in charge, and central banks responded in a single week. The Fed, ECB and BoJ hiked, and the BoE stayed put 🏦. The dollar index is holding around 100 📈.
🇺🇸 USD — the strongest story
The Fed raised rates by 25 bps to 3.75–4.00%, its first hike since 2023 and a unanimous one. The dot plot allows one more hike this year. Safe-haven demand from the Middle East adds fuel 🔥. It holds as long as oil stays high. An Iran de-escalation is the main threat ⚠️.
🇪🇺 EUR — capped
The ECB lifted its deposit rate to 2.50%, with euro area inflation at 3.3% in August. Lagarde won’t pre-commit to a path. EUR/USD is near 1.1475, close to its seven-week low 📉. Rallies look hard to sustain while the Fed leads.
🇬🇧 GBP — hawkish hold, weak pound
The BoE held at 3.75% in a 6–3 vote, with three members wanting 4%. UK inflation is 3.1% and the Bank sees it near 3¾% by Q4. Even so, GBP/USD sits near 1.3390 as the Fed gap bites. Support is at 1.3340 and 1.3270, resistance at 1.3430 🎯.
🇯🇵 JPY — the wildcard
The BoJ hiked to 1.25%, a 31-year high, by a 7–2 vote. The yen still slid, with USD/JPY near 157, because Ueda gave no firm signal on the next hike 😬. Markets watch 160 for possible intervention 🚨. Support is at 155.40.
📅 Watch: flash PMIs on Wednesday, September 23, plus Iran and oil headlines 👀.
✅ Our view: USD strength is the best-backed move. EUR and GBP stay under pressure while the rate gap lasts. JPY needs caution near 160 ⚡.
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NordFX: After the Policy Shock — Which USD, EUR, GBP and JPY Moves Can Hold? 🌍💥 was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.