Dollar Strengthens as Markets Brace for Fed (09.15.2026)

Central bank policy takes center stage as investors prepare for a series of major rate decisions this week. 

The euro slipped toward 1.15 and sterling fell below 1.35 as markets priced a 92% probability of a Fed rate hike on Wednesday, while elevated oil prices added to inflation concerns. Gold and silver remained near five-week lows as the 10-year Treasury yield approached 5%. The yen also eased toward 155 ahead of Friday’s BoJ meeting, where policymakers are widely expected to raise rates to 1.25%.

Euro Slips Toward $1.15

The euro weakened toward $1.15, its lowest since mid-August, as the dollar remained firm ahead of Wednesday’s expected Fed rate hike. Oil above $100 amid escalating Gulf tensions added to inflation concerns and pressured bond markets. Following last week’s rate increase, the ECB signaled further tightening, with markets expecting at least one more hike this year. Attention now turns to the Fed on Wednesday, BoE on Thursday and BoJ on Friday, with the BoJ widely expected to raise rates.

The first resistance is positioned at 1.1560 while the support starts from 1.1530.

Gold Holds Near Five-Week Low

Gold traded around $4,300 per ounce, remaining near a five-week low as rising oil prices strengthened expectations for tighter Fed policy. Markets now price roughly a 92% chance of a 25-basis-point hike on Wednesday. Continued disruption to Saudi Arabia’s East-West pipeline and uncertainty over Russia-Ukraine energy attacks kept oil elevated. Meanwhile, the 10-year Treasury yield approached 5%, adding pressure on gold. The Bank of Japan is also widely expected to raise rates on Friday.

First resistance is seen at $4350, with initial support near $4260.

Yen Eases Toward 155

The Japanese yen weakened toward 155 per dollar, extending losses for a second session as the dollar strengthened ahead of an expected Fed rate hike. Higher oil prices also pressured Japan’s energy-dependent economy. Still, the yen remained near seven-month highs amid expectations for tighter BoJ policy and carry-trade unwinding. The BoJ is widely expected to raise rates to 1.25% on Friday, the highest since April 1995, with markets also watching for signals of another hike this year.

First resistance is seen at 155.00, with initial support near 153.80.

Pound Falls Below $1.35

The British pound fell below $1.35, its weakest since mid-August, as the dollar strengthened ahead of Wednesday’s expected Fed rate hike. The BoE is expected to hold rates at 3.75% on Thursday, although rising oil prices have increased inflation concerns. Goldman Sachs expects a 25-basis-point hike in November, supported by persistent inflation and resilient UK growth. Markets are pricing in four BoE hikes by mid-2027, while Governor Andrew Bailey remains cautious about near-term tightening.

From a technical view, resistance stands near 1.3530, with support around 1.3450.

Silver Holds Near Five-Week Low

Silver traded near $63 per ounce, close to a five-week low as elevated oil prices reinforced expectations for tighter Fed policy. Markets now price around a 92% chance of a 25-basis-point hike on Wednesday. Continued disruption to Saudi Arabia’s East-West pipeline kept energy prices elevated, while the 10-year Treasury yield approached 5%, adding pressure on silver. The Bank of Japan is also expected to raise rates on Friday amid persistent inflation risks.

From a technical view, resistance stands near $64.80, while support is located around $62,70.