Forex Today: All eyes on US September inflation data


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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.

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