Log in to today’s North American session Market wrap for September 16
Trump shook markets today after signing Miran’s papers for him to join the Federal Reserve committee, just hours before the start of the central bank’s 2-day meeting.
The Fed’s independence is in question here with the move from Donald Trump to appoint his Economic Adviser at the FED just as the meeting commences.
The move sent the US Dollar tumbling close to its 2025 lows (96.55 today vs. 96.37 on July 1st), igniting a new wave of selling.
Dollar bears came back in force, with the Swiss franc standing out as the preferred hedge against the greenback’s weakness ahead of tomorrow’s session.
This breakdown was actually highlighted throughout yesterday’s DXY analysis but accelerated as markets received the Miran news.
USDCHF is finishing the session down about 1% but was down about 1.20% at its lows.
Furthermore, with the SNB’s main rate at the border of 0%, in case a jumbo 50 bps cut takes place, the rate differential would decrease and rendering the CHF as an optimal hedge.
This play is more fundamental for institutional participants who have billions of dollars that will be affected by tomorrow’s decision.
Nonetheless, the current market pricing is largely skewed towards a 25 bps.
The curve steepened aggressively along the move in the US Dollar, and as can be seen on several of our FX articles, the US Dollar hit now lows on the year against the Euro and the CHF.
On other subjects, Trump also announced fresh agreements with China on TikTok which will preview a call between the US President and China’s Xi.