Forex Today: All eyes on US September inflation data

Eren Sengezer FXStreet

Here is what you need to know on Thursday, October 12:

The US Dollar (USD) is struggling to find demand early Thursday, with the US Dollar Index is edging lower toward 105.50 after closing the last six trading days in negative territory. Weekly Initial Jobless Claims and September Consumer Price Index (CPI) data will be featured in the US economic docket later in the day. The European Central Bank will release the accounts of the September policy meeting.

US CPI Data Preview: Inflation expected to extend downward trend in September.

Risk flows continued to dominate the financial markets in the second half of the day on Wednesday, causing the USD to continue to weaken against its rivals. Wall Street's main indexes closed in positive territory and the benchmark 10-year US Treasury bond yield broke below 4.6%, erasing more than 2% on a daily basis. Growing expectations about the Federal Reserve (Fed) leaving the policy rate unchanged for the rest of the year on dovish comments from policymakers triggered a downward correction in US bond yields this week. Meanwhile, the Fed's September meeting minutes showed late Wednesday that members generally judged the risks to achieving goals had become more two-sided, while most of them continued to see upside risks to inflation.

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 weakest against the Swiss Franc.

	USD	EUR	GBP	CAD	AUD	JPY	NZD	CHF
USD		-0.64%	-0.82%	-0.59%	-0.76%	-0.04%	-0.66%	-1.10%
EUR	0.62%		-0.19%	0.06%	-0.15%	0.60%	-0.01%	-0.44%
GBP	0.83%	0.19%		0.25%	0.03%	0.79%	0.15%	-0.26%
CAD	0.58%	-0.06%	-0.24%		-0.18%	0.54%	-0.08%	-0.51%
AUD	0.76%	0.18%	-0.01%	0.23%		0.77%	0.14%	-0.30%
JPY	0.02%	-0.59%	-0.79%	-0.54%	-0.81%		-0.65%	-1.06%
NZD	0.67%	0.03%	-0.15%	0.10%	-0.12%	0.64%		-0.44%
CHF	1.03%	0.45%	0.26%	0.51%	0.27%	1.04%	0.41%

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 Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

EUR/USD extended its weekly uptrend and touched its highest level since in over two weeks above 1.0630 before going into a consolidation phase.

The data published by the UK's Office for National Statistics (ONS) revealed early Thursday that the real Gross Domestic Product (GDP) expanded by 0.2% on a monthly basis in August, following the 0.6% contraction recorded in July. Other data showed that Industrial Production and Manufacturing Production declined by 0.7% and 0.8% in the same period. GBP/USD showed no immediate reaction to these figures and the pair was last seen holding steady slightly above 1.2300.

USD/JPY registered small gains on Wednesday. The pair, however, finds it difficult to pull away from 149.00 early Thursday. Bank of Japan (BoJ) board member Asahi Noguchi said on Thursday that the biggest focus will be on whether wage hike momentum will be maintained or not when deciding on policy.

Gold continued to benefit from falling US yields and extended its rally on Wednesday. Early Thursday, XAU/USD stretched higher and was last seen trading near $1,880.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

GBP/USD hits multi-week tops around 1.3560

GBP/USD gathers fresh steam and advances to new three-month peaks near the 1.3560 zone on Friday. Cable’s sharp move higher comes after three daily drops in a row and follows the increasing selling pressure hurting the Greenback.

EUR/USD pops to fresh two-month highs, targets 1.1600

EUR/USD advances markedly, revisiting the upper 1.1500s for the first time since mid-June. The pair’s sharp uptick comes on the back of a strong retracement in the US Dollar amid BoJ intervention chatter and despite steady uncertainty in the Middle East.

Gold picks up pace, approaches $4,400

Gold rebounds toward the $4,400 mark per troy ounce on Friday, reversing the previous day’s pullback. The precious metal’s recovery comes as fresh and intense weakness keep weighing on the US Dollar, while traders keep assessing easing expectations of an imminent Fed interest rate hike and the situation from the Middle East.

Pi Network Price Forecast: PI extends consolidation as bulls eye $0.10

Pi Network (PI) price holds steady on Friday, maintaining a consolidating tone for three consecutive days. Mild retail strength in the PI token remains stable, with Open Interest above $9 million, while social buzz eases. PI token’s technical outlook is mixed, as bearish momentum wanes to neutral, with bulls eyeing the $0.1000 psychological level.

Weekly focus: Some relief in US inflation concerns

Actual inflation data for July came out as expected with a 0.1% m/m increase in headline CPI and 0.2% excluding food and energy. Annual headline inflation remains too high at 3.4% and means that wage earners are experiencing stagnating spending power at best, and core inflation is a bit higher than the inflation target of two percent would suggest.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.