Fed Preview: Dollar Slips, Gold Pauses, Musk Boosts Tesla

The dollar continued to trend lower on Tuesday, September 16, 2025, hitting a 4-year low versus the euro while gold took a break from its record-breaking rally. The moves came before Wednesday’s all-important Federal Reserve rate decision. Anticipation has been building for months ahead of what is now widely expected to be a decision by the Fed to cut rates.

Tesla (TSLA) shares bucked the trend of a generally softer stock market, rising 2.8% on Tuesday to its highest since February. Improved investor sentiment around the company was bolstered by news that CEO Elon Musk has bought $1 billion in Tesla stock.

TL;DR

• USD EUR 4-Year Low: Dollar weakness accelerated 0.9% ahead of expected Fed rate cut

• Gold Price Consolidation: Gold steadied at $3,702 after a record-breaking rally

• Tesla Stock Surge: Musk's $1B stock purchase lifted shares 2.8% to the highest since February

• Interest Rates Decision: Fed widely expected to cut rates by 25bps on Wednesday

USD EUR Hits 4-Year Low on Fed Rate Cut Expectations

The US dollar fell 0.9% against the euro on Tuesday, sinking to a fresh 4-year low. In the days leading up to today’s (Wednesday) Federal Reserve meeting, the dollar has come under renewed selling pressure. 

The FOMC is expected to cut interest rates by 25 basis points, perhaps striking a more dovish tone than in prior meetings, especially in the wake of a particularly weak August non-farm payrolls report. The so-called ‘dot plot’ summarising interest rate projections and Chair Jerome Powell’s press conference provide an indication whether Fed members will lean; either dovish or hawkish.

Although US retail sales for August came in hotter than expected on Tuesday, the dollar still sold off as investors remain concerned about the health of the US economy, with concurrent rising prices.

Gold Price Pauses Rally at Record $3,702 High

After hitting another record high of $3,702.95 the previous day, gold ticked lower on Wednesday morning, 17 September, as traders sat on their hands before the upcoming Federal Reserve rate decision.

Gold has discovered renewed strength in recent weeks, thanks in part to the weakness of the US dollar, which is denominated in gold. With the Fed seemingly set to lower interest rates, gold is a relatively more attractive asset to investors, given that it earns no interest. Gold is also classically viewed as a hedge against inflation and economic uncertainty. (Source: Reuters)

Elon Musk Buys $1 Billion in Tesla Stock

The market is seemingly viewing CEO Elon Musk's recent purchase of 2.5 million Tesla shares as a vote of confidence in his electric vehicle (EV) company, buying up stock in unison. Musk has bought $1 billion worth of Tesla shares, adding to his existing 13% stake in the company.

It is his first purchase since 2020 and could signal he is looking to rebuild a larger stake after years of selling down the stock, in part to fund other ventures like X (formerly Twitter). It could also be another sign of his renewed commitment to the company after his recent foray into politics, particularly in support of President Donald Trump in the 2024 US election. (Source: BBC)

Conclusion

Markets are holding their breath for the Federal Reserve’s rate decision, with the dollar under pressure and gold pausing its rally, while Tesla stole the spotlight as Elon Musk’s $1 billion stock purchase boosted investor sentiment.

*Past performance does not indicate future results. The above are only projections and should not be taken as investment advice.