Forex Today: Big central bank week starts quietly

Here is what you need to know on Monday, September 18:

Financial markets stay relatively calm to begin the new week as investors gear up for big central bank policy meetings this week. The economic docket will not feature any high-tier data releases on Monday. The People's Bank of China and the Federal Reserve will announce interest rate decisions on Wednesday, followed by the Swiss National Bank, the Bank of England and the Bank of Japan.

After posting gains for the ninth straight week, the US Dollar Index edges lower early Monday. Meanwhile, US stock index futures trade modestly higher and the 10-year US Treasury bond yield holds steady above 4.3%. 

Following the sharp decline witnessed after the European Central Bank's (ECB) policy decisions last week, EUR/USD stays in a consolidation phase above 1.0650 in the early European session. Germany's Bundesbank is scheduled to release its monthly report later in the day.

GBP/USD registered a daily close below 1.2400 for the first time since late May on Friday. The pair clings to small recover gains near that level early Monday. Ahead of the BoE's policy decisions on Thursday, the UK Office for National Statistics will publish Consumer Price Index (CPI) data on Wednesday.

AUD/USD holds steady at around 0.6450 following the previous week's choppy action. In the early trading hours of the Asian session on Tuesday, the Reserve Bank of Australia (RBA) will release the minutes of the August policy meeting, at which officials decided to leave the cash rate unchanged at 4.1%.

NZD/USD trades in positive territory above 0.5900 early Monday. The inflation outlook for the year ending March 2024 has been revised higher. The New Zealand Institute of Economic Research (NZIER) unveiled revised economic projections early in the day and said that the annual CPI inflation is forecast to ease to 4.3% in the year ending March 2024 before decreasing to 2.4% in 2025.

USD/JPY came under modest bearish pressure early Monday and retreated to the 147.50 area. 

Gold price staged a decisive rebound on Friday and erased all of its weekly losses. Early Monday, XAU/USD holds its ground and trades in positive territory near $1,930 amid retreating US yields.