Forex Today: US Dollar clings to gains as bond yields push higher ahead of Powell speech

Eren Sengezer FXStreet

Here is what you need to know on Thursday, October 19:

Supported by surging US Treasury bond yields and safe-haven flows, the US Dollar outperformed its rivals on Wednesday, with the US Dollar Index closing in positive territory. As the 10-year US yield continues to stretch higher toward 5%, the USD holds its ground early Thursday. Later in the day, Federal Reserve (Fed) Chairman Jerome Powell will speak before the Economic Club of New York and the US economic docket will feature weekly Initial Jobless Claims data alongside Existing Home Sales figures for September.

Wall Street's main indexes suffered large losses on Wednesday as investor reacted to mixed third quarter earnings results and escalating geopolitical tensions. In the European morning, US stock index futures trade modestly lower, reflecting a cautious market stance. "The near-term outlook for the economy was generally described as stable or having slightly weaker growth," the Fed's Beige Book showed late Wednesday.

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 New Zealand Dollar.

	USD	EUR	GBP	CAD	AUD	JPY	NZD	CHF
USD		-0.26%	0.10%	0.53%	0.01%	0.13%	1.31%	-0.47%
EUR	0.22%		0.36%	0.76%	0.27%	0.36%	1.58%	-0.22%
GBP	-0.14%	-0.39%		0.39%	-0.12%	0.00%	1.18%	-0.61%
CAD	-0.56%	-0.82%	-0.43%		-0.54%	-0.42%	0.76%	-1.03%
AUD	-0.01%	-0.28%	0.07%	0.50%		0.09%	1.31%	-0.51%
JPY	-0.13%	-0.33%	0.00%	0.39%	-0.11%		1.17%	-0.58%
NZD	-1.38%	-1.63%	-1.27%	-0.84%	-1.36%	-1.24%		-1.89%
CHF	0.44%	0.24%	0.58%	0.99%	0.51%	0.60%	1.80%

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).

According to the latest report, Israeli air raids continued overnight and the Israel Defense Forces noted that there has been a "significant escalation" of conflict with Hezbollah.

After coming within a touching distance of 1.0600 on Wednesday, EUR/USD reversed its direction and closed in negative territory. Early Thursday, the pair consolidates its losses in a narrow channel slightly below 1.0550.

Following the bullish action seen in the European session on stronger-than-forecast UK Consumer Price Index (CPI) data on Wednesday, GBP/USD came under bearish pressure in the American session. The pair stays on the back foot in the European morning on Thursday and trades below 1.2150.

"It's normal not to announce currency intervention immediately after it's done. Basically, we won't make comment when intervening in the FX market," Japan's top currency diplomat Masato Kanda said on Thursday when asked about stealth intervention. USD/JPY showed no immediate reaction to these comments and was last seen moving sideways above 149.50.

Gold capitalized on safe-haven demand and climbed to its highest level since late July above $1,960 on Wednesday. Rising US yields, however, caused XAU/USD to erase a portion of its daily gains in the American session. Early Thursday, the pair holds steady at around $1,950.

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.

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