Drivers for the Week of September 14, 2026

The week’s central-bank decisions should favor the yen while leaving the US dollar and sterling exposed to dovish surprises.

• US core CPI rose 0.3% month on month in August, while core services excluding housing increased 0.5%; however, real hourly earnings fell for a fifth consecutive month.
• The Fed is expected to raise rates by 25 basis points to 3.75%-4.00% after five meetings on hold, but nearly 100 basis points of tightening is already priced over the next twelve months, limiting the dollar’s upside.
• The BOJ is expected to raise rates to 1.25%, with a 50-basis-point move a tail risk; because the policy rate is near the estimated 1.10%-2.50% neutral range, the risks favor further yen gains.
• The BOE is expected to hold rates at 3.75% while reducing gilt runoff from £70 billion to £50 billion for October 2026-September 2027, but the swaps curve’s pricing of 125 basis points of hikes to 5.00% appears too aggressive.
• Canada’s August core inflation is expected at 2.1% year on year, which would reinforce expectations for a 25-basis-point BOC hike to 2.50% on October 28; New Zealand’s weaker growth and a large gap between RBNZ guidance and swap pricing instead leave NZD vulnerable.

Takeaway: Investors should favor JPY exposure, remain cautious on USD and GBP if the Fed or BOE disappoints hawkish expectations, and monitor Canadian inflation as the key near-term catalyst for CAD.