Forex · 17 September 2026
Dollar Surges After Fed Hike—BoE and BoJ Decisions Loom
Fed's first rate rise since 2023 drove EUR/USD to one-month lows; Bank of England decides today, Bank of Japan tomorrow.
Ultimo Research
The dollar strengthened sharply after the Federal Reserve raised its benchmark rate by 25 basis points to a target range of 3.75%-4% on Wednesday, marking its first increase since 2023. The Committee decided to raise the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent, voting unanimously for the move. Updated projections showed that a strong majority of officials think another hike is possible later this year, with 16 of the 18 participants expected another rate increase, marking a hawkish turn that caught some traders off guard. The shift in Fed policy comes as inflation remains elevated, driven in part by energy price pressures.
EUR/USD fell to 1.1540 on September 16, 2026, touching its weakest level in a month as the dollar gained across the board. The single currency faced additional pressure from diverging policy outlooks: while the Fed moves into tightening mode, markets are now pricing the ECB deposit rate at around 2.9% by December, up from the current 2.5%, a considerably lower trajectory. The combination of Fed hawkishness and persistent euro-zone growth concerns has shifted rate differentials firmly in the dollar's favour.
What the calendar says
The focus now turns to two central bank decisions on successive days. The Bank of England decision is on Thursday 17 September 2026, announced at 12:00 UK time (11:00 UTC), with GBP/USD traders watching for any shift from the current 3.75% Bank Rate. The Bank of England held its base rate at 3.75% on 30 July 2026 in a divided 6–3 vote — three policymakers wanted a rise to 4.00%. The current UK interest rate is 3.75%. Market participants will scrutinize the vote split and minutes for clues on whether the three dissenters gain support amid rising UK inflation.
Tomorrow, the Bank of Japan concludes its two-day policy meeting on 18 September 2026 (no fixed time published). All 52 BOJ watchers forecast borrowing costs will be raised at the end of a two-day meeting on Sept. 18, according to a Bloomberg survey. The decision matters for USD/JPY and risk sentiment broadly, as further BoJ tightening would mark another step away from ultra-loose policy. Our economic calendar carries both releases with live updates.
EUR/USD: technical breakdown gathers pace
The hourly chart shows EUR/USD in a sustained downtrend from early September highs near 1.1650. Price action has carved out a series of lower highs and lower lows, breaking below the 1.1600 handle mid-month and accelerating through 1.1550 after the Fed decision. The pair closed near 1.1477 in today's Asian session, the lowest print since mid-August.
Support now sits at the 1.1460–1.1470 zone, a congestion area visible on the left side of the chart from late August. A breach there opens 1.1400 and potentially 1.1350. Resistance has flipped: 1.1550, previously support, now caps rallies, with stronger barriers stacked at 1.1600 and 1.1650. Momentum remains firmly to the downside; any bounce toward 1.1550 would offer a lower-risk short entry for those trading the trend, though volatility around today's BoE decision and tomorrow's BoJ outcome may disrupt intraday flow. The structure points to further dollar strength as long as the pair holds below 1.1550.
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