Forex Today: Markets trade with caution ahead of key US inflation data

Here is what you need to know on Wednesday, September 13:

Traders prefer to stay on the sidelines, as a cautious mood prevails ahead of the all-important Consumer Price Index (CPI) inflation data from the United States. The high-impact data release will likely influence the US Federal Reserve’s (Fed) interest rate outlook and set the tone for markets before next week’s Fed policy announcements.

Rising oil prices combined with the revival of hawkish expectations from the European Central Bank (ECB) and the Bank of Japan (BoJ) kept investors unnerved, as they refrained from placing fresh bets. The ECB's quarterly projections will put inflation north of 3.0% in 2024, Reuters reported on Wednesday, citing sources. Meanwhile, chatters were doing the rounds that the BoJ could end its negative interest rate policy in January 2024.

Asian stock markets traded with decent losses, tracking the negative sentiment on Wall Street overnight, The US S&P 500 futures are edging 0.11% lower on the day, at the press time, reflective of the risk-averse scenario.

Across the FX board, the US Dollar is recovering from the previous decline, benefiting from the risk-off mood and a fresh uptick in the US Treasury bond yields.

US Dollar price today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.

USD   0.12% 0.29% 0.11% 0.33% 0.07% 0.20% 0.00%
EUR -0.09%   0.20% -0.02% 0.25% -0.06% 0.07% -0.14%
GBP -0.28% -0.15%   -0.17% 0.05% -0.23% -0.09% -0.29%
CAD -0.11% 0.02% 0.18%   0.25% -0.02% 0.09% -0.12%
AUD -0.33% -0.19% -0.06% -0.22%   -0.25% -0.14% -0.34%
JPY -0.08% 0.06% 0.20% 0.04% 0.24%   0.13% -0.08%
NZD -0.18% -0.07% 0.09% -0.08% 0.14% -0.10%   -0.19%
CHF 0.01% 0.10% 0.29% 0.12% 0.33% 0.08% 0.16%  

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 Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

USD/JPY is consolidating the recovery above 147.00, having hit a weekly high of 147.45 after BoJ purchased Japanese government bonds (JGB) in early Asia.

EUR/USD is reversing the rebound, as investors resort to profit-taking ahead of the US CPI data.

GBP/USD is losing further ground, approaching 1.2400 after the UK economy contracted more than expected in July. The Office for National Statistics (ONS) said Gross Domestic Product shrank 0.5% in July from June, worse than forecasts of a 0.2% contraction.

AUD/USD is trading under heavy selling pressure around 0.6400 while USD/CAD is rising back toward 1.3600, undeterred by the ongoing surge in oil prices. WTI is consolidating near ten-month highs of $88.74.

Gold price is flirting with three-week lows of $1,907 after yielding a downside break from the recent trading range on Wednesday.

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