Forex Today: Risk on plus higher yields as investors struggle for a catalyst

Valeria Bednarik FXStreet

What you need to know on Wednesday, October 20:

The American dollar edged lower against high-yielding rivals and remained flat against those considered safe-havens as the market’s sentiment somehow improved. Global indexes closed in the green, with speculative interest ignoring tepid macroeconomic figures.

The EUR/USD pair hit a three-week high of 1.1669 but ended the day in the 1.1630 price zone, as demand for the EUR was capped by comments from ECB’s Lane. The chief economist said that medium-term inflation pressures are under the central bank’s target, somehow suggesting a longer wait-and-see stance.

GBP/USD trades around 1.3800, backed by speculation the BOE will soon start raising rates. The UK will publish inflation figures on Wednesday and may trigger some wild action in the pound’s crosses.

The Australian dollar was the best performer, advancing up to 0.7485 against the greenback and retaining its intraday gains. The USD/CAD pair fell to 1.2310 but trimmed losses ahead of the close.

Crude oil prices maintained their positive tone, with WTI settling at $82.20 a barrel. Gold surged intraday but finished the day with modest gains at around $1,769 a troy ounce.

US Treasury yields rallied to fresh multi-week highs ahead of Wall Street’s close. The yield on the 10-year note hit 1.644% and settled nearby. Firmer yields may give the dollar a respite should the rally there continues.

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD meets initial support around 1.1800

EUR/USD remains on the back foot, although it has managed to reverse the initial strong pullback toward the 1.1800 region and regain some balance, hovering around the 1.1850 zone as the NA session draws to a close on Tuesday. Moving forward, market participants will now shift their attention to the release of the FOMC Minutes and US hard data on Wednesday.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

Ethereum Price Forecast: BitMine extends ETH buying streak, says long-term outlook remains positive

Ethereum (ETH) treasury firm BitMine Immersion continued its weekly purchase of the top altcoin last week after acquiring 45,759 ETH.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.