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.

GBP/USD revisits 1.3530; Dollar pushes harder

GBP/USD adds to the weekly correction and recedes toward the 1.3530 zone on Friday. Indeed, Cable faces increasing selling pressure on the back of extra gains in the Greenback, particularly fuelled by Chair Warsh’s speech at the Jackson Hole Symposium and the US NFP Annual Revision (-79K).

EUR/USD breaches below 1.1600, multi-day lows

EUR/USD now accelerates its decline and retreats to seven-day troughs in the sub-1.1600 region at the end of the week. The pair’s pullback comes on the back of the strong rebound in the US Dollar after Chair Warsh delivered a hawkish message in Jackson Hole, while the US NFP Annual Revision came in at -79K.

Gold challenges its 200-day SMA near $4,530

Gold’s decline gathers fresh steam, hitting weekly lows while disputing its critical 200-day SMA near $4,530 per troy ounce. The yellow metal’s increasing weakness comes in response to the generalised upbeat tone in the US Dollar and the widespread rebound in US Treasury yields, as investors continue to reprice a Fed rate hike in September.

Week ahead: RBNZ and BoC decide on rates ahead of all-important US NFP

The US dollar staged a modest recovery this week, perhaps as traders decided to cover some of their short positions amid slightly stickier or in-line US PCE inflation numbers for July, confounding expectations of softer prints amid the softness revealed in the CPI data for the month.

CFTC Report: CAD short covering leads; Gold buying surges

The week in one sentence: speculative positioning shifted more constructively in the week to August 25. CAD short covering led the move, followed by a broad reduction in EUR shorts and renewed Gold buying. GBP and VIX positioning also improved, while JPY positioning deteriorated and WTI flows diverged from weaker prices.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.