Forex Today: Inflation comes to the fore with US PPI and China’s CPI

Pablo Piovano FXStreet

The US Dollar (USD) managed to leave behind a drop to multi-week lows and regain some upside traction on Tuesday, while market participants assessed the NFP Annual Revision amid speculation of a larger rate cut by the Federal Reserve at its meeting next week.

Here's what to watch on Wednesday, September 10:

The US Dollar Index (DXY) staged a comeback from seven-week lows near 97.20 amid a decent rebound in US yields across the curve and rising speculation of a potential 50 basis point rate cut by the Fed next week. The release of Producer Prices will take centre stage, seconded by the weekly MBA Mortgage Applications, and the weekly report on US crude oil stockpiles by the EIA.

EUR/USD corrected from recent highs and retested the 1.1720-1.1710 band as political concerns weighed down on the sentiment. The speech by the ECB’s Buch will be the only event on the domestic docket.

GBP/USD dropped modestly, fading the initial move to four-week highs in levels just shy of the 1.3600 barrier. The RICS House Price Balance will be the next data release on the UK calendar on September 11.

USD/JPY bounced off four-week lows around 146.30 as speculation over further rate hikes by the BoJ returned to the radar. The Reuters Tankan index, BSI Large Manufacturing index, Producer Prices, and weekly Foreign Bond Investment figures are all due on September 11.

AUD/USD clocked humble losses near 0.6600 following an early move to the area of YTD peaks. The Consumer Inflation Expectations and the speech by the RBA’s Connolly are expected on September 11.

Prices of the barrel of WTI flirted with three-day highs north of the $63.00 mark as traders shifted their attention to potential fresh sanctions on Russia.

Gold prices hit an all-time high past $3,670 per troy ounce, always underpinned by steady bets on rate cuts by the Federal Reserve. Silver prices receded from recent peaks, returning to the sub-$41.00 zone per ounce.

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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.

EUR/USD looks weak below 1.1800

EUR/USD has slipped back under pressure, breaking through the 1.1800 support and drifting towards the weekly lows near 1.1770 ahead of the opening bell in Asia. The move reflects renewed strength in the US Dollar, with steady geopolitical tensions keeping its demand firm. Moving forward, the release of the German labour market report and flash inflation figures should keep European investors entertained on Friday.

GBP/USD threatens the 200-day SMA near 1.3440

GBP/USD rapidly leaves behind Wednesday’s strong advance, coming under heavy pressure and retesting the 1.3440 zone, where the critical 200-day SMA is located. Cable’s deep pullback follows the strong gains in the Greenback, while investors continue to pencil in a potential BoE rate cut in March.

Gold remains below $5,200 despite tariff jitters and geopolitical risks

Gold is seen consolidating in a range below the $5,200 mark during the Asian session on Friday amid mixed cues. Trade jitters, along with the risk of a potential US-Iran war, act as a tailwind for the safe-haven bullion. Meanwhile, the Fed's hawkish outlook keeps the US Dollar close to the monthly high and caps the non-yielding yellow metal. Nevertheless, the commodity remains on track to register gains for the fourth straight week, though the fundamental backdrop warrants some caution for bullish traders.