A sense of normality returned to financial markets on Wednesday after the utter chaos witnessed in the previous session.

Asian shares rose on Tuesday, tracking the positive overnight cues from Wall Street as investors turned cautiously optimistic over the highly anticipated US inflation report. In Europe, stock futures point to a mixed open along with US markets, despite the recent positive market sentiment. Easing oil prices have injected financial markets with a sense of optimism that inflation may slow in the United States, resulting in less aggressive rate hikes from the Federal Reserve.

The mighty dollar has been an unstoppable force in 2022, flattening everything in its path.

UPDATE: Next Bank of England decision has been postponed from Sept. 15 to Sept. 22

Red-hot inflation remains a scourge for the global economy, undermining its post-pandemic recovery. In response, central bankers have been furiously hiking interest rates in other to tame runaway consumer prices.

There’s been a lot of major movements across currency markets of late, as the US dollar’s scorched-earth ascent to a fresh 20-year high leaves its major peers lying in a heap.

And some of our recent Market Analysis report had served as a prelude to these major FX moves.

In case you missed it, let’s revisit some of them:

With less than 24 hours until the highly anticipated European Central Bank Meeting (ECB) meeting, our currency spotlight shines on the euro!

Market sentiment lacked conviction on Tuesday morning despite the Chinese government pledging more efforts to support economic growth. Asian shares were mixed as investors braced for the return of traders from across the pond. US markets were closed yesterday due to the Labor Day holiday, but the Dow and S&P 500 futures are signaling a positive open this afternoon. In Europe, shares tumbled in the previous session thanks to the region’s worsening energy crisis with stock futures pointing to a negative open this morning.

The fierce war against inflation is set to continue this week with more central banks heavily armed, locked, loaded and ready for battle.

Our focus falls on the European Central Bank (ECB) which is expected to unleash a monetary bazooka in the form of a 75-basis point rate increase! Such a move will place the ECB among the ranks of 40+ central banks that have increased rates by 75bp or more in one go this year in the face of soaring inflation.

Markets generally dislike uncertainty.

Yet, that doesn’t stop traders and investors from trying to price in what they think is likely to happen in their view.

And if the official outcome doesn’t pan out according to market expectations, that usually triggers major volatility in prices, as positions are swiftly unwound.

Over the past 5 years, September has been the benchmark Dollar index’s second-best month of the year!

Since 2017, this month has seen an average monthly gain of 0.9% for DXY, second only to February’s 0.99% average climb.

Here’s how the greenback has fared historically against its major peers over the past five Septembers (2017-2021):