|

Forex Today: ECB-speak could unveil some details around the rate path (or not)

The US Dollar accelerated its uptrend and traded at shouting distance from the area of three-month highs on the back of higher yields and the resumption of the “Trump trade” among market participants.

Here is what you need to know on Tuesday, October 22:

The US Dollar Index (DXY) climbed further and came at shouting distance from the key 104.00 barrier helped by rising US yields. The Richmond Fed Manufacturing Index is due along with the speech by the Fed’s Harker.

EUR/USD resumed its deep pullback and approached the 1.0800 region once again on Monday. All the attention will be on the ECB, as Lagarde, McCaul and Lane are all due to speak.

GBP/USD succumbed to the Dollar’s gains and broke below the key support at 1.3000 the figure. Public Sector Net Borrowing figures will be published followed by the speech by the BoE’s Bailey.

USD/JPY advanced to multi-week tops well north of the 150.00 hurdle following the firm performance of US and Japanese yields. Next on tap in Japan will be the weekly Foreign Bond Investment figures along with the preliminary Jibun Bank Manufacturing and Services Index on October 24.

AUD/USD deflated to six-week lows near 0.6650 on the back of usual concerns from China, the stronger Dollar and weaker commodity prices. The advanced Judo Bank Manufacturing and Services PMIs will be the next salient event in Oz on October 24.

Prices of WTI regained the smile and reversed six straight days of losses on Monday, this time reclaiming the area beyond the key $70.00 mark per barrel.

Prices of Gold rose to a record high around $2,740 mark per ounce troy in response to the stronger Greenback and rising US yields. Silver prices, on the flip side, rose past the $34.00 mark per ounce for the first time since November 2012, ending the day marginally on the upside.

Author

Pablo Piovano

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

More from Pablo Piovano
Share:

Editor's Picks

AUD/USD struggles near 0.7150 as Fed hike bets and Middle East risks underpin USD

AUD/USD kicks off the new week on a weak note and hovers near Friday's low, around mid-0.7100s, as the US Dollar holds up on rising Fed rate-hike bets, bolstered by the US CPI. Furthermore, escalating Middle East tensions and clashes in the Strait of Hormuz underpin the safe-haven USD. However, hawkish RBA expectations could help limit deeper losses for the Aussie.

USD/JPY holds steady near mid-153.00s as traders await Fed/BoJ rate decisions

USD/JPY consolidates near a seven-month low touched last Tuesday as traders move to the sidelines ahead of the FOMC decision on Wednesday and the BoJ policy update on Friday. Meanwhile, a more hawkish repricing of the BoJ's normalization path supports the Japanese Yen, while rising Fed rate-hike bets and geopolitical risks underpin the US Dollar, leading to the pair's subdued price action at the start of the new week.

Gold consolidates above $4,300 as traders await Fed rate decision this week

Gold struggles to capitalize on Friday's modest bounce from sub-$4,300 levels and kicks off the new week on a subdued note as traders move to the sidelines ahead of a slew of central bank events. Meanwhile, the latest US inflation figures reaffirmed September Fed rate-hike bets and cap the non-yielding bullion. Moreover, escalating US-Iran tensions act as a tailwind for the safe-haven US Dollar, keeping XAU/USD bulls on the back foot.

Week ahead: Fed, BoJ and BoE decide amid inflation dilemma
A crucial central bank week looms for markets as both the Federal Reserve and Bank of Japan are under pressure from all sides, with their credibility at stake. The Bank of England looks set to have an easier ride, at least for now, while inflation releases will be watched too as war continues to rage in the Middle East.
CFTC Report: Japanese Yen reversal leads a broader positioning reset
The week in one sentence: Yen positioning swung back into net longs in the week to September 8, leading to a 103.0K-contract improvement. Canadian Dollar shorts also fell sharply, while Oil buying accompanied another price rise. Euro, Sterling and Swiss Franc positioning weakened despite firmer currencies, leaving those moves unconfirmed by speculative flows.
Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight
The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.