Forex Today: Focus shifts to US PCE, ADP, inflation in OZ and Chinese PMIs

The US Dollar (USD) has accelerated its recovery, adding to the positive start to the week and clinching new multi-week tops, always helped by the persistent advance in US Treasury yields and unabated geopolitical concerns.

Here is what you need to know on Wednesday, September 30:

The US Dollar Index (DXY) has approached the 101.60 zone for the first time since late July, as investors continued to assess the lack of progress in the Middle East conflict and the ongoing rise in US Treasury yields across the curve. The usual MBA Mortgage Applications are due, seconded by the ADP Employment Change, PCE, Personal Income/Spending, the Chicago PMI, the final Q2 GDP Growth Rate and the EIA’s weekly report on crude oil stockpiles. In addition, the Fed’s Goolsbee and Barkin will also speak.

EUR/USD has declined to three-month lows, coming just pips away from the key 1.1300 support level amid the firmer bias in the US Dollar and persistent geopolitical jitters from the US-Iran conflict. Germany will be in focus tomorrow with the release of Retail Sales, the labour market report and the preliminary Inflation Rate. Additionally, the ECB’s Schnabel is due to speak.

GBP/USD has followed the sentiment surrounding the rest of its risk-linked peers, challenging the 1.3200 region, or fresh three-month lows. Next on tap on the UK docket will be the Q2 Current Account results, Nationwide Housing Prices, quarterly Business Investment figures and the final Q2 Growth Rate. 

USD/JPY has traded with a modest upside bias, adding to Monday’s gains near 157.50 following the improvement in the Greenback and US yields. The flash Industrial Production prints are due on September 30 alongside Retail Sales, Housing Starts and Construction Orders.

AUD/USD has come under fresh and quite marked downside pressure on Tuesday, breaching below the critical 0.7000 yardstick while reversing two daily advances in a row. The key Inflation Rate is due on September 30, seconded by flash Building Permits, Private House Approvals and Private Sector/Housing Credit figures.

Front-month WTI futures have lost further ground, putting the key $90.00 mark per barrel to the test amid the third consecutive daily drop, always amid the resurgence of geopolitical tensions in the US-Iran-Hormuz conflict.

Gold has managed to partially regain ground lost at the beginning of the week, although another test of the $4,200 mark per troy ounce has remained elusive. The better tone in the US Dollar and the strong rebound in US Treasury yields across the curve have continued to weigh on the precious metal.