Forex Today: ECB rate decision, US inflation data to drive market action

FXStreetSep 11, 2025 7:23 AM

Here is what you need to know on Thursday, September 11:

Major currency pairs trade in narrow ranges early Thursday as investors move to the sidelines ahead of key events. The European Central Bank (ECB) will announce its interest rate decision and the US Bureau of Labor Statistics (BLS) will release the Consumer Price Index (CPI) data for August later in the day.

US Dollar Price This week

The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Canadian Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.19%	-0.03%	-0.35%	0.34%	-0.86%	-0.62%	0.09%
EUR	-0.19%		-0.23%	-0.47%	0.14%	-1.05%	-0.75%	-0.10%
GBP	0.03%	0.23%		-0.32%	0.37%	-0.82%	-0.53%	0.14%
JPY	0.35%	0.47%	0.32%		0.62%	-0.53%	-0.41%	0.48%
CAD	-0.34%	-0.14%	-0.37%	-0.62%		-1.09%	-0.90%	-0.24%
AUD	0.86%	1.05%	0.82%	0.53%	1.09%		0.29%	0.96%
NZD	0.62%	0.75%	0.53%	0.41%	0.90%	-0.29%		0.67%
CHF	-0.09%	0.10%	-0.14%	-0.48%	0.24%	-0.96%	-0.67%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

The US Dollar (USD) Index failed to make a decisive move in either direction on Wednesday as the cautious market mood helped the USD stay resilient against its rivals despite the soft producer inflation data. The BLS reported on Wednesday that the Producer Price Index (PPI) rose 2.6% on a yearly basis in August. This reading followed the 3.1% increase recorded (revised from 3.3%) in July and came in below the market expectation of 3.3%. The annual CPI inflation is forecast to edge higher to 2.9% from 2.7% in July. On a monthly basis, the CPI and the core CPI are both seen increasing 0.3%. Early Thursday, the USD Index holds its ground and stays in positive territory at around 98.00. Meanwhile, US stock index futures trade marginally higher. The US economic calendar will also feature the weekly Initial Jobless Claims data.

EUR/USD stabilized near 1.1700 in the European morning on Thursday after registering small losses on Wednesday. The ECB is widely anticipated to leave key rates unchanged following the September meeting. Alongside the policy statement, the ECB will also release the revised macroeconomic projections.

During the Asian trading hours, Reserve Bank of New Zealand (RBNZ) Governor Christian Hawkesby reiterated that their central projection for the Official Cash Rate (OCR) is to drop to about 2.50% by the end of the year, but he added that this could happen faster or slower based on economic recovery evolution. NZD/USD showed no reaction to these comments and was last seen trading slightly below 0.5950.

GBP/USD continues to move sideways above 1.3500 after closing virtually unchanged on Wednesday.

USD/JPY clings to small daily gains above 147.50 in the European session on Thursday. The data from Japan showed that the PPI increased 2.7% on a yearly basis in August following the 2.5% increase seen in July. This print came in line with the market expectation.

After correcting from record highs on Tuesday, Gold registered modest gains on Wednesday. XAU/USD struggles to gather bullish momentum early Thursday and trades below $3,630.

Inflation FAQs

What is inflation?

Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.

What is the Consumer Price Index (CPI)?

The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.

What is the impact of inflation on foreign exchange?

Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.

How does inflation influence the price of Gold?

Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.

Disclaimer: The information provided on this website is for educational and informational purposes only and should not be considered financial or investment advice.