Exchange Rate Forecasts: Sterling, Euro, US Dollar, Aus Dollar, Yen

The drop in the Aussie has been the major move in the FX trading today, amid RBA Governor talked down the currency during his pessimistic speech overnight.

Elsewhere, the key talking point is the two-day FOMC meeting starting from today. Majors remain ranged with slight negative bias before Fed’s decision to be announced tomorrow.

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Below are the latest short-term foreign exchange rate forecasts issued by OCBC Bank ahead of tomorrow's US Fed decision:

Pound dollar exchange rate forecast

September monetary aggregates are on tap today while our ongoing neutral stance on the pair remains in force, especially after the BOE’s Dale noted on Monday that the option of further QE “remains firmly on the table”. Note that any broad dollar resilience in the coming sessions may drag cable back towards the 1.6000 neighborhood.

Euro dollar exchange rate forecast

Expect more range bound behaviour from the pair given the caution ahead of the FOMC and an inherent suspicion of official EZ discomfort with the EUR’s recent gains. As noted previously, upside progress may be somewhat guarded with chatter of a technical fatigue and expect resistance towards 1.3835 and then 1.3850 while 1.3770 may provide initial support.

Dollar yen exchange rate forecast

USD-JPY may remain buffeted by potential near term USD resilience and risks of volatility from the risk appetite front. In the interim, the USD-JPY may continue to straddle its 200-day MA (97.44) amid our still heavy bias.

Australian dollar to US dollar forecast

In the wake of the comments from the RBA governor this morning, the AUD may continue to feel the heat, especially if China-related jitters still on the boil. Expect supports at 0.9520 before 0.9500 while 0.9600 should cap in the current environment.