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Forex Today: Mixed action in markets as focus stays on geopolitics

Here is what you need to know on Tuesday, October 10:

Financial markets trade mixed early Tuesday as investors keep an eye on headlines surrounding the Israel-Hamas conflict. The US Dollar (USD) Index clings to small recovery gains slightly above 106.00 following Monday's pullback, while US stock index futures trade virtually unchanged in the early European session. In the absence of high-impact data releases, market participants will pay close attention to speeches from central bankers, including European Central Bank (ECB) President Christine Lagarde.

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 New Zealand Dollar.

 USDEURGBPCADAUDJPYNZDCHF
USD 0.08%0.18%0.20%0.38%0.44%0.45%0.07%
EUR-0.08% 0.10%0.12%0.29%0.39%0.35%-0.02%
GBP-0.19%-0.09% 0.02%0.20%0.27%0.27%-0.13%
CAD-0.21%-0.12%-0.03% 0.17%0.27%0.23%-0.14%
AUD-0.38%-0.31%-0.21%-0.18% 0.10%0.06%-0.33%
JPY-0.43%-0.38%-0.29%-0.24%-0.10% -0.03%-0.41%
NZD-0.48%-0.40%-0.30%-0.27%-0.09%0.01% -0.42%
CHF-0.03%0.05%0.15%0.18%0.36%0.41%0.40% 

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).

Following a bearish opening, Wall Street's main indexes gained traction and closed in positive territory despite escalating geopolitical tensions. Dovish comments from Federal Reserve officials made it difficult for the USD to find demand in the American session and helped the risk mood improve. Meanwhile, the benchmark 10-year US Treasury bond yield opened sharply lower below 4.7% following a three-day weekend.

In a statement released on Tuesday, Israel Defense Forces said that a dozens of fighter jets attacked more than 200 targets in Gaza overnight. Meanwhile, the United Nations Relief and Works Agency (UNRWA) reported that shelters in Gaza were at 90% capacity, with more than 137,000 people seeking refuge.

During the Asian trading hours, Chinese property developer Country Garden said that it was facing significant uncertainty about asset disposals and warned that it might not be able to meet offshore debt obligations. Despite this development, Hong Kong's Hang Seng Index gained nearly 1% on a daily basis, while Shanghai Composite lost more than 0.5%.

After starting the week on the back foot and edging lower in the European trading hours, EUR/USD staged a rebound and closed flat on Monday. Early Tuesday, the pair stretched higher and stabilized above 1.0550.

GBP/USD found support after dropping toward 1.2150 on Monday and ended the day above 1.2200. In the European morning, the pair lost its recovery momentum and went into a consolidation phase below 1.2250.

Bank of Japan (BoJ) is considering raising the fiscal year (FY) 2023/24 core Consumer Price Index (CPI) estimate to near 3% from the 2.5% forecast in July, Kyodo news agency reported on Tuesday, citing some sources with knowledge of the matter. USD/JPY showed no immediate reaction to this headline and was last seen trading in positive territory near 149.00.

Gold benefited from safe-haven demand and falling US Treasury bond yields and reached its highest point in 10 days above $1,860 before retreating slightly below that level. 

Author

Eren Sengezer

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.

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