Forex Today: Focus shifts to US CPI, while the ECB is seen “on hold”

Pablo Piovano FXStreet

Mounting speculation of further rate cuts by the Federal Reserve next week weighed down the US Dollar (USD) on Wednesday, a view reinforced after US Producer Prices rose less than expected in August.

Here's what to watch on Thursday, September 11:

The US Dollar Index (DXY) faded Tuesday’s mild recovery, hovering around the 97.60 region as investors digested the softer-than-estimated Producer Prices and got ready for Thursday’s more relevant CPI data. Indeed, the Inflation Rate will take centre stage seconded by the weekly Initial Jobless Claims.

EUR/USD regained some composure, reclaiming the 1.1700 barrier and beyond after bottoming out near 1.1680. The ECB is widely anticipated to maintain its interest rates unchanged for the second meeting in a row.

GBP/USD clocked decent gains, revisiting the 1.3560 zone following the Greenback’s knee-jerk. The RICS House Price Balance will be the only data release on the UK docket.

USD/JPY added to Tuesday’s decline, challenging once again its key contention zone around 147.00. Attention will be on the BSI Large Manufacturing index, Producer Prices, and weekly Foreign Bond Investment figures.

AUD/USD stepped on the gas and rose to levels last seen in early November 2024 past the 0.6630 level, further extending its monthly recovery. The Consumer Inflation Expectations and the speech by the RBA’s Connolly are due next in Oz.

Prices of WTI rose for the third consecutive day, trespassing the $64.00 mark per barrel amid geopolitical tensions and despite a bearish EIA’s report on US crude supplies.

Gold prices resumed their uptrend on Wednesday, retesting the $3,650 zone per troy ounce while rapidly leaving behind Tuesday’s knee-jerk. Silver prices followed suit, setting aside the previous day’s pullback and reclaiming the $41.00 mark per ounce.

Author

Pablo Piovano

FXStreet

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

AUD/USD sits at three-week highs above 0.7000 on hawkish RBA-speak

AUD/USD holds a positive bias for the fourth straight day, trading above 0.7000 in the Asian session on Wednesday and at three-week highs. RBA Deputy Governor Andrew Hauser's hawkish remarks and inflation concerns underpin the pair. However, the upside appears capped as the US Dollar attracts some buyers amid looming US-Iran uncertainty.

USD/JPY remains confined in a familiar range below 158.50

USD/JPY sees some dip-buying in the Asian session on Wednesday, though it remains confined within a multi-week range near 158.50 as the uncertainty over the timing of the next BoJ rate hike keeps Japanese Yen bulls on the defensive. Meanwhile, hawkish Fed expectations, bolstered by inflation risks stemming from volatile oil prices, underpin the US Dollar. However, looming intervention fears could limit JPY losses and cap the currency pair.

Gold bounces off weekly low; Fed hike bets and modest USD recovery keep upside limited

Gold recovers slightly from the weekly low, around the $4,100 neighborhood, though the upside potential seems limited amid a bearish fundamental backdrop. Inflation risks stemming from volatile oil prices underpin prospects for further policy tightening by the US Federal Reserve. Furthermore, a modest US Dollar recovery from a near three-week low could contribute to capping bullion.

Zcash's bullish reversal eyes $1,698 peak on NU7 upgrade

Zcash (ZEC) shows signs of bullish recovery above $1,200 on Wednesday, following a 9% rebound the previous day linked to the upcoming NU7 upgrade. Blockworks released a Zcash holders report on Tuesday, highlighting steady network growth. The technical outlook for ZEC is bullish, with bulls eyeing an extended rally toward $1,698.

US – Midterm update: Pre-election tail risk scenarios

With two weeks until the US midterm elections on 3 November, early voting has already opened in more than 40 states. Prediction markets are broadly unchanged since we published our Midterm update, 13 October. The prediction market Polymarket continues to see Democrats winning both chambers as the most likely outcome, with a 62.5% probability.

The US Dollar fell. Gold didn't rally. That tells you everything

Gold (XAU/USD) is struggling to capitalize on a weaker US Dollar (USD), after repeatedly failing to establish itself above the $4,200 level. The precious metal remains confined to a relatively narrow trading range despite a combination of developments that would normally support higher prices.