FOMC cuts 25bp as expected, but Powell’s tone triggers sharp USD reversal – AUD/USD back below 0.6650.

Forex Market

USD: Post-FOMC Reversal
The USD initially weakened after the FOMC’s 25bp rate cut but rebounded sharply following Powell’s press conference.
• AUD/USD spiked to 0.6707 highs before retreating to 0.6641 lows
• EUR/USD climbed to 1.19185 before falling nearly 100 pips to 1.1819
• GBP/USD reached 1.3726 then dropped to 1.3625
• USD/JPY fell to 145.495 before rebounding to 145.85
• USD/CAD briefly hit 1.37275 lows, then surged to 1.3787 highs
• NZD/USD broke above 0.6000 to 0.6007 highs, then reversed to 0.5950
AUD: Rangebound, Modestly Softer
AUD/USD dipped to 0.6631 during NY trade but remained within a 0.6631–0.6668 range. The pair continues to meet resistance near 0.6670, with strong support seen above 0.6500.

General Market

Wall Street

A mixed session ended with the Nasdaq +0.4%, S&P 500 flat, and Dow Jones -0.6%. U.S. 10-year yields rose 5bps to 4.07%. Brent Crude gained 0.4% to $66.80/bbl.

Asia-Pacific

Equities were mixed: Hang Seng +1.2%, Nikkei +0.9%, Shenzhen -0.6%, and ASX 200 +0.7% with materials and real estate outperforming. AUD/USD traded around 0.6644–0.6668.

Europe

European markets opened mostly lower: CAC -0.4%, Stoxx & DAX -0.3%, while FTSE rose +0.3%. Gilts yielded 4.625%. Brent traded at $66.80/bbl.

Key Economic Data Ahead (Sydney Time)

 

Headlines to Watch

    • FOMC delivers 25bp cut — as expected, but one dissent (Miran favored 50bp); forward guidance still cautious
    • Powell pushes back on rate cut cycle — calls it a “risk management cut”, not the start of a long easing path
    • USD reverses sharply higher — AUD/USD hits intraday high of 0.6707 before plunging to 0.6641
    • U.S. Housing data disappoints — August starts -8.5%, permits -3.7%, suggesting softening in the real estate sector
    • BoC cuts by 25bp to 2.50% — no forward guidance; CAD volatility remains subdued ahead of FOM
    • EU CPI revised down — August core unchanged but headline YoY trimmed to 2.0%, EUR/USD remains pressured

Mid-market rates

Currency PairMid-market Rate
AUD/USD0.6649
AUD/NZD1.1167
AUD/JPY98.13
AUD/CNY4.7339
AUD/EUR0.5671
AUD/GBP0.4906
AUD/HKD5.1733

Chart of the day

 

 

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