Forex Today: Market focus shifts to US producer inflation data
Here is what you need to know on Wednesday, September 10:
The US Dollar (USD) largely ignored the significant downward benchmark revision to the employment data and outperformed its rivals on Tuesday. Early Wednesday, the USD stays in a consolidation phase as market focus shifts to producer inflation data for August. Later in the American session, the US Treasury will hold a 10-year note auction.
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.02% | -0.24% | -0.57% | 0.08% | -0.85% | -0.90% | -0.22% | |
| EUR | 0.02% | -0.23% | -0.47% | 0.09% | -0.82% | -0.84% | -0.20% | |
| GBP | 0.24% | 0.23% | -0.34% | 0.32% | -0.60% | -0.61% | 0.03% | |
| JPY | 0.57% | 0.47% | 0.34% | 0.58% | -0.31% | -0.48% | 0.38% | |
| CAD | -0.08% | -0.09% | -0.32% | -0.58% | -0.83% | -0.92% | -0.30% | |
| AUD | 0.85% | 0.82% | 0.60% | 0.31% | 0.83% | -0.01% | 0.63% | |
| NZD | 0.90% | 0.84% | 0.61% | 0.48% | 0.92% | 0.01% | 0.64% | |
| CHF | 0.22% | 0.20% | -0.03% | -0.38% | 0.30% | -0.63% | -0.64% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
The US Bureau of Labor Statistics' preliminary benchmark revision to employment data showed that 911,000 fewer jobs than initially reported were added by March 2025. Although this reading caused the USD to come under with the immediate reaction, the USD Index managed to reverse its direction, possibly supported by the 'buy the rumor, sell the fact' market action. In the European morning on Wednesday, the USD Index holds steady above 97.50, while US stock index futures trade mixed. Later in the session, the Producer Price Index is forecast to rise by 3.3% on a yearly basis in August, matching July's increase.
Escalating tensions in the Middle East allowed Gold to gather bullish momentum and reach a new record-high above $3,670 on Tuesday. Following a downward correction, XAU/USD ended the day marginally lower. Early Wednesday, Gold holds steady at around $3,650. Israel carried out a strike on senior Hamas leaders in Qatar's capital, Doha, claiming to have targeted those "directly responsible for the brutal October 7 massacre." Qatar released an official response, calling the attack a "flagrant violation of international law" and condemning Israel's "cowardly" strike.
In the Asian session on Wednesday, the data from China showed that the Consumer Price Index (CPI) declined by 0.4% on a yearly basis in August, after remaining unchanged in July. AUD/USD gains traction midweek and trades in positive territory above 0.6600.
EUR/USD lost more than 0.4% on Tuesday and erased a large portion of Monday's gains. After dipping below 1.1700, the pair found support and was last seen trading marginally higher on the day above 1.1710.
After rising toward 1.3600 on Tuesday, GBP/USD reversed its direction and closed the day in negative territory. The pair stays relatively quiet early Wednesday and trades slightly below 1.3550.
USD/JPY moves sideways slightly below 147.50 in the European session on Wednesday after closing virtually unchanged on Tuesday.
(This story was corrected on September 10 at 07:18 GMT to say that Gold holds steady at around $3,650 early Wednesday, not Friday.)
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
