Forex Today: It's all about the Federal Reserve

The US Dollar (USD) accelerated its decline on Tuesday, hitting levels last seen in early July as investors continued to assess the likelihood of extra interest rate cuts by the Federal Reserve in the next few months.

Here's what to watch on Wednesday, September 17:

The US Dollar Index (DXY) broke below the 97.00 support to hit two-month lows on the back of solid selling pressure and declining US yields across different time frames. The FOMC gathering and the updated "dots plot" will be in the spotlight, seconded by Housing Starts, Building Permits, the MBA Mortgage Applications, and the EIA's weekly report on US crude oil inventories.

EUR/USD clocked a fresh yearly peak around 1.1880 following the increasing downward bias in the Greenback. The final Inflation Rate in the euro area is due along with the speech by the ECB's Cipollone.

GBP/USD advanced to multi-week highs around the 1.3680 zone in response to the widespread retracement in the US Dollar and firm UK data releases. The Inflation Rate will be at the centre of the debate across the Channel.

USD/JPY dropped to five-day troughs and revisited the mid-146.00s following the marked pullback in the US Dollar. The Balance of Trade figures are due on the domestic calendar.

AUD/USD hit a yearly high near 0.6680, opening the door to a potential visit to the 0.6700 barrier sooner rather than later. The Westpac Leading Index and the speech by the RBA's Jone are due next in Oz.

Prices of WTI reached two-week highs north of the $64.00 mark per barrel helped by the weaker US Dollar, upcoming rate cut by the Fed and fears over supply disruption.

Gold prices hit an all-time high just above the $3,700 mark per troy ounce as investors continued to evaluate the likeliness of further easing by the Fed in the latter part of the year. Silver prices rose to nearly the $43.00 mark per ounce for the first time since September 2011.