S&P 500 — US Large Cap Index
FTSE 100 — UK Blue Chips
Euro Stoxx 50 — Eurozone Leaders
DAX 40 — German Equities
CAC 40 — French Market Index
Nikkei 225 — Japan Benchmark
Hang Seng — Hong Kong Index
Shanghai Composite — China Mainland
ASX 200 — Australian Market
TSX Composite — Canada Index
Nifty 50 — India Large Cap
STI Index — Singapore Market
KOSPI — South Korea Index
Bovespa — Brazil Equities
JSE Top 40 — South Africa Index
IPC Index — Mexico Market
- USD/CHF depreciates as the US Dollar loses ground amid improved risk-on sentiment.
- UOB Group strategists note strong momentum, but state it’s too early to confirm a USD/CHF break above 0.8300.
- Fed’s Musalem warns inflation could stay above 2% without earlier, incremental rate increases.
USD/CHF loses ground for the fourth consecutive day, trading around 0.8200 during Asian hours on Tuesday. The pair depreciates as the US Dollar (USD) declines on increased risk-on sentiment due to trade and diplomatic prospects: traders are closely monitoring an upcoming US-China summit for signs of improving relations between the world’s two largest economies.
Additionally, hopes for a diplomatic breakthrough in the Middle East have improved investor mood following news that Iranian President Masoud Pezeshkian will lead a delegation at the UN General Assembly, alongside comments from US President Donald Trump indicating he would likely be open to a side meeting.
USD/CHF outlook stays constructive as UOB flags key support level
Strategists at UOB Group maintain a constructive 1–3 week outlook on USD/CHF, having “turned positive on USD almost two weeks ago.” They note that, as of September 17, with spot around 0.8250, “while momentum remains strong, it was too early to tell whether it was sufficient for USD to break above 0.8300,” and emphasize that this assessment “remains unchanged.” In their view, “only a breach of 0.8185 (no change in ‘strong support’ level) would indicate that 0.8300 is not coming into view.”
However, the Greenback may regain ground due to ongoing hawkish sentiment surrounding the Federal Reserve (Fed) policy stance.
Musalem flags need for earlier, incremental rate hikes to curb stubborn inflation
The Fed’s Musalem delivers a distinctly hawkish message, with an 8/10 FXS Speechtracker score standing above the 7.4/10 historical average and underscoring a stronger-than-usual tightening bias relative to the established baseline. Musalem warns that without further policy restraint, inflation is likely to remain substantially above the 2% target even 18 months ahead, highlighting broad-based commodity shocks beyond oil, still-elevated underlying inflation near 3%, and business pricing plans anchored closer to 3%, all consistent with a preference for earlier and incremental rate increases despite a labor market judged to be around full employment but not the main source of price pressures.
The FXS Fed Sentiment Index rises by 0.42 points to 149.96, reinforcing that Fed rhetoric remains firmly in hawkish territory well above the neutral 100 threshold. The combination of a higher-than-baseline FXS Speechtracker score and an index level near 150 signals a policy stance that continues to favor additional rate hikes, a backdrop typically supportive of the Dollar against lower-yielding peers.
Goolsbee flags persistent supply shocks, keeps Dollar bulls wary of overheating demand
Fed’s Goolsbee delivered a relatively more impactful speech, with an FXS Speechtracker score of 7.4 versus a historical average of 6.4, underscoring heightened market relevance. The emphasis on being “optimistic” about returning to 2% inflation only if demand does not overheat, alongside the admission that the Fed is still parsing supply versus demand drivers, signals a conditional and data-dependent stance that leans cautiously hawkish. By stressing that strong demand, energy, tariffs, and other supply shocks are all feeding inflation and that supply-side pressures must fade to restore a “credible path” to 2%, the remarks reinforce the risk that policy may need to stay tighter for longer, a supportive backdrop for the Dollar.
The FXS Fed Sentiment Index slipped by 1.07 points to 149.54, indicating a modest pullback in perceived hawkishness even as the gauge remains firmly above the neutral 100 mark. This configuration shows that, despite a slight softening in tone, the Fed is still viewed as operating in clearly hawkish territory, and the stronger-than-baseline FXS Speechtracker score suggests markets will continue to price in a vigilant stance on inflation, with implications for Dollar resilience versus the Euro and Yen.
