USD firms across majors as Fed hike fears hit equities before September meeting

Risk appetite deteriorated ahead of the Federal Reserve's September policy meeting, with US stock futures falling sharply and Nasdaq-100 contracts leading the decline. The move reflects growing market conviction that the Fed will deliver a rate hike rather than remain on hold, a repricing that has lifted front-end US yields and underpinned the dollar against high-beta currencies such as AUD/USD and NZD/USD. Traditional risk-off flows have also supported USD/JPY-sensitive safe-haven demand, while EUR/USD and GBP/USD face pressure from the widening rate differential in favour of the dollar. Elsewhere, headlines that OpenAI is exploring an Australian data-centre expansion offer a modest medium-term investment story for AUD, but carry limited immediate FX impact against the dominant Fed narrative. Until the FOMC decision and accompanying dot plot are released, positioning is likely to stay defensive, with equity-linked currencies vulnerable to further downside. Traders should expect elevated intraday volatility, wider spreads around the announcement, and sharp two-way reactions to any change in the Fed's forward guidance language.