Thu, Sep 17, 2026. Full report (upgraded: trade booked, board changed).
Entry 1.14690 · target 1.13750 · stop 1.15270 · reward 1.6× risk · spot 1.14692
This joins my two highest-conviction currency views in one pair: the Fed took the funds rate to 4.00% from 3.75% and the path repriced after the event, with Goldman ditching one-and-done and TD forecasting hikes in October and January, while the 2Y sits at 4.67% and the 10Y at 5.00%, both at or near 20-day highs. The euro leg has no meeting until late October, French bond yields are surging with questions over whether the ECB steps in, and Trump is threatening very heavy tariffs on Europe over Canada's associate-membership bid. I prefer this to short GBP/USD because the MPC votes at 11:00Z with three standing dissents for a hike into a 3.1% CPI print, a live hawkish tail on the sterling leg, whereas the euro has only Lagarde on Friday. Price broke the 20-day range low and closed at 1.14692, 4% of range, on the FOMC hour. It is invalidated by a recovery above 1.1527, the pre-FOMC shelf, or by Fed commentary walking back the second hike; the known risk is that EUR specs are already net short 42,616 and got shorter by 17,691 on the week.
Entry 0.58650 · target 0.59300 · stop 0.58220 · reward 1.5× risk · spot 0.58646
The franc is being sold as a funding leg, not bought as a haven: it hit a 15-month low, sits near 16-month lows against the dollar, the 3M interbank rate is -0.045% and still falling, and carry traders are reported to be eyeing it as the yen's funding appeal ebbs. Against that I want the currency with a live hike, and that is the Australian dollar: hike odds are reported at 87%, the IMF says the RBA should be ready to raise again, and Bullock speaks at 23:30Z tonight. I take this rather than adding to dollar-franc, which is already open and 75 pips into its target, and rather than AUD/USD, where the hawkish Fed sits on the other side of the trade. Structure agrees: 0.58646 is 96% of the 20-day range and 3.21% higher over twenty days, above both moving averages. It is invalidated if Bullock leans on the housing slump HSBC flags, or if mild risk-off becomes real risk-off and AUD/JPY loses the 109.674 low.
🔴 Risk-off (mild). Helps USD, JPY; hurts AUD, CAD, CHF.
VIX at 17.71 is up 7.59% in five days and 18.94% in twenty, at 76% of its range, while the S&P 500 at 7552 is down 1.11% in five days and sits at 17% of its 20-day range. AUD/JPY at 110.66 is at 19% of its 20-day range, down 1.83% over twenty days, confirming the credit-sensitive channel is heavy. But gold is down 4.59% in twenty days and at 13% of range, so this is a yield-driven de-rating rather than panic: higher US rates weigh on equity valuations and global growth.
| Commodity | Direction | Helps | Hurts | Note |
|---|---|---|---|---|
| oil | 🔴 DOWN | JPY, EUR, CHF | CAD | WTI at 101.66 is down 0.75% on the day and 0.80% in five days, though still +18.44% over twenty; Brent at 105.18 is down 2.28% in five days. Prices are sliding as Middle East supply-disruption fears ease and Saudi Arabia reroutes crude via Oman, with the Russia sanctions bill and Houthi-Saudi fighting the two-sided risk. |
| gold | 🔴 DOWN | USD | CHF, AUD | Gold at 4336.6 is down 1.16% on the day, 1.60% in five days and 4.59% in twenty, sitting at 13% of its 20-day range. A hawkish Fed with the 10Y at 5.00% raises the carry cost of a non-yielding asset; gold is not confirming the haven bid. |
| copper | ⚪ FLAT | AUD | — | Copper at 6.528 is up 1.49% on the day and 0.94% in five days but only 0.62% over twenty, at 47% of its 20-day range. That is range-bound: the daily bounce gives AUD a small tailwind but no trend. |
| iron ore | ⚪ FLAT | — | — | No price feed. The news is about volume and strategy rather than price: Australian iron ore exports framed as more than tonnage, and a new tenement application beside Rio Tinto's Robe mine. Nothing here changes the terms of trade in either direction over the next week. |
| natural gas | 🟢 UP | USD, CAD | EUR, JPY, CHF | US natural gas at 2.907 is up 2.58% in five days and 3.30% in twenty, at 64% of its 20-day range. Energy costs keep pressure on UK prices and are stirring BoE hike talk, which makes this a rate-path input for GBP as much as a terms-of-trade drag. |
| Currency | View | Conviction | Rate now | Next meeting | Path vs priced | Non-rate factor |
|---|---|---|---|---|---|---|
| USD | 🟢 UP | ●●● | 3.63% effective (Aug 2026); FOMC target raised to 4.00% from 3.75% on 16 September | not in feed; next FOMC late October: ⬆️ hike (leaning) | more hawkish than priced | Tariff politics cut both ways: threats against the EU over Canada's associate-membership bid and a sanctions bill with up to 100% tariffs on energy buyers raise the dollar's relative appeal while damaging global growth. |
| EUR | 🔴 DOWN | ●●● | 2.50% deposit rate | not in feed; ECB decided 10 September, next decision late October: ➡️ hold (leaning) | as priced | Trump has threatened very heavy tariffs and even a halt to trade with Europe over the Canada associate-membership proposal, and French bond yields are surging with questions over whether the ECB steps in. Both are euro-negative. |
| CHF | 🔴 DOWN | ●●● | -0.045% 3M interbank rate | not in feed; SNB quarterly assessment due late September: ➡️ hold (likely) | as priced | This remains the whole story and it has intensified. The franc hit a 15-month low and sits near 16-month lows against the dollar, UBS sees EUR/CHF retesting 0.96 as the franc lags on low yield, and carry traders are eyeing the franc as the yen's funding appeal ebbs. A currency being sold as a funding leg does not rally on mild risk-off. |
| JPY | 🟢 UP | ●●○ | 0.977% immediate rate | Sep 18 02:30Z BOJ: ⬆️ hike (leaning) | more hawkish than priced | Two-sided. Tokyo vows effort to maintain orderly yen moves and corporate leaders are sounding the alarm over yen weakness, which is intervention-adjacent rhetoric. Against that, the Fed's hike widens the differential and specs flipped to net long 10,796 on a 103,023 swing, so the easy positioning fuel is spent. |
| CAD | 🔴 DOWN | ●●○ | 2.25% | not in feed; next BoC decision in October: ➡️ hold (leaning) | as priced | Oil should be carrying this and is not: WTI is +18.44% over twenty days while CAD is -0.38% against the basket, and crude is now easing. Trade politics are additive negatives, with Trump threatening tariffs over the Canada-EU proposal. |
| GBP | ⚪ FLAT | ●○○ | 3.7313% immediate rate; Bank Rate 3.75% | Sep 17 11:00Z MPC: ➡️ hold (likely) | more hawkish than priced | UK natural gas exposure: US gas up 2.58% in five days and energy costs keep pressure on prices. Retail sales Friday forecast -0.2% is a growth offset. |
| AUD | ⚪ FLAT | ●○○ | 4.35% | not in feed; RBA Gov Bullock speaks Sep 17 23:30Z, next decision early October: ⬆️ hike (leaning) | more hawkish than priced | Commodities are neutral-to-helpful: copper +1.49% on the day but flat over twenty, and iron ore news is about tonnage and tenements, not price. Risk-off caps the upside, with AUD/JPY at 19% of its range. |
View is against the basket of the other six over 2-5 days; conviction is The desk's own, 1 to 3. Scored at 3 trading days.
The Fed delivered. The 16 September FOMC took the funds rate to 4.00% from 3.75%, its first hike in three years, and the dollar gapped higher on the 18:00Z candle across the board: EUR/USD 1.1533 to 1.1473, GBP/USD 1.3440 to 1.3382, USD/CHF 0.8182 to 0.8250, USD/CAD 1.3935 to 1.3989. Critically, it was not a one-and-done: Goldman has ditched its one-hike call and now sees a second, and TD forecasts hikes in October and January. That is the hawkish repricing my previous board said was not in the price. The 2Y sits at 4.67% and the 10Y at 5.00%, both rising, and DXY at 100.25 is at 94% of its 20-day range.
The rest of the week is a test of who follows. The BoE decides at 11:00Z today with the rate forecast unchanged at 3.75% and the vote at 3-0-6, and the consensus is a hold despite CPI at 3.1%. Energy costs are stirring hike talk. The BOJ follows at 02:30Z Friday with the calendar carrying a policy-rate forecast below 1.25% against below 1.00% previously — described as the bank's hardest decision in decades, with Tokyo already vowing to maintain orderly yen moves. The IMF says the RBA should be ready to raise again, with hike odds reported at 87%.
The non-rate overlay is trade politics. Trump has threatened heavy tariffs on the EU over von der Leyen's proposal for Canadian associate membership, and the House has passed a Russia sanctions bill carrying tariffs of up to 100% on major energy buyers. That is a EUR and CAD negative and an oil wildcard, though crude is easing today as Middle East supply fears recede.
| Size | Change | |
|---|---|---|
| USD | ‼️ big | direction flat → up |
| USD | ‼️ big | path vs priced: as priced → more hawkish |
| USD | ▫️ small | decision confidence likely → leaning |
| USD | ▫️ small | conviction 1 → 3 |
| EUR | ▫️ small | conviction 1 → 3 |
| GBP | ‼️ big | direction up → flat |
| GBP | ▫️ small | conviction 2 → 1 |
| JPY | ▫️ small | decision confidence likely → leaning |
| CAD | ▫️ small | conviction 1 → 2 |
| Impact | Ccy | Headline | Pushes | Reading |
|---|---|---|---|---|
| 🔥 large | USD | Fed raises key rate to 4.00%, first hike in three years; Goldman ditches one-and-done, TD sees October and January hikes | USD up → EUR/USD down, USD/CAD up | The move was priced but the path was not: the repricing to a second and third hike is what took the 2Y to 4.67% and the 10Y to 5.00%. This is the dominant rate-path input on the board. |
| 🔸 medium | EUR | Trump threatens 'very heavy tariffs' or halting trade with Europe over Canada's EU associate-membership bid | EUR down, CAD down → EUR/USD down | A growth and terms-of-trade threat aimed at both the euro and the Canadian dollar at once, with no offsetting policy response available before late October. |
| 🔸 medium | JPY | Yen weakens to the 156 level after the Fed; Japan vows effort to maintain orderly yen moves; BOJ faces 'hardest decision in decades' | JPY up into tomorrow → EUR/JPY down, CHF/JPY down | A 25bp hike is not fully in the price if the yen slipped on the Fed. Official talk of orderly moves adds a one-way tail against yen weakness. |
| 🔸 medium | CAD | Oil extends losses as Middle East supply-disruption fears ease and Saudi Arabia reroutes crude via Oman | Oil down → CAD down, USD/CAD up | The one support the Canadian dollar had is being withdrawn: WTI is down 0.80% in five days while the policy gap to the Fed widens to 175bp. |
| 🔸 medium | CHF | Swiss franc hits 15-month low; carry traders eye franc as the yen's funding appeal ebbs; UBS sees EUR/CHF retest of 0.96 | CHF down → AUD/CHF up, EUR/CHF up | Confirms the franc is priced as a funding leg with a negative policy rate, which is why it is not rallying into a VIX up 7.59% in five days. |
| 🔸 medium | GBP | Bank of England set to defy the Fed's lead and hold at 3.75% despite CPI at 3.1%, with energy costs stirring hike talk | GBP two-sided → EUR/GBP hinges on the statement | The decision is consensus; the vote split and the language on energy pass-through are the trade, with three members already dissenting for a hike. |
| ▫️ small | AUD | IMF says the RBA should be ready to raise rates again as hike odds reach 87% | AUD up → AUD/CHF up | Keeps the Australian rate path hawkish into Bullock at 23:30Z, against an SNB with nothing to do. |
| ▫️ small | USD | US House clears Russia sanctions bill with tariffs of up to 100% on major energy buyers; India warns on ties | Oil two-sided, USD up → USD/CAD mixed | The only credible upside risk to crude in the window, and simultaneously a global growth negative that supports the dollar. |
| ▫️ small | USD | A stronger dollar and rising yields: how the Fed's hike could hit global markets | Risk-off mild → AUD down, JPY up | Explains the shape of this de-rating: the S&P at 17% of its 20-day range with gold down 4.59% over twenty days is a yield story, not a panic. |
TRADES (The desk's own, target/stop/expiry): 0 won, 3 lost, 1 expired/closed of 4 (0%), net -247 pips; 5 open Conviction 2: 0 won, 2 lost of 2 (0%), net -82 pips 3 of 4 conditions: 0 won, 1 lost of 1 (0%), net -40 pips 0 of 4 conditions: 0 won, 1 lost of 1 (0%), net -42 pips IDEAS (direction at the horizon): none scored yet; 16 pending, next due Fri 18 Sept CURRENCY CALLS (direction vs basket, 3 trading days): 8 right, 8 wrong, 6 flat of 22 (36%); by conviction 4: 1/5, conviction 3: 6/7, conviction 2: 0/8, conviction 1: 1/2; 21 pending
Two new trades, both routed through the conviction-3 views the scorecard says I read best: the dollar's repriced path against a euro with no meeting until late October, and a franc being used as funding collateral against the one central bank with 87% hike odds. I am deliberately not doubling the dollar leg with USD/CAD while the USD/CHF long is still open. The two things that would change my mind: Fed officials walking back the second-hike pricing, which would unwind the whole dollar side at once, and a BOJ that hikes tomorrow but frames it as terminal, which would hand the yen back to the carry trade and take pressure off both of my open yen and franc positions from opposite directions. I also watch the 11:00Z MPC vote closely; a 4-5 split for a hike hurts trade #5 and I will not argue with it.
Data warnings: news: FXStreet: 403