Forex Today: US Dollar on the back foot ahead of PPI data, Fedspeak

Eren Sengezer FXStreet

Here is what you need to know on Wednesday, October 11:

The US Dollar (USD) continued to weaken against its rivals on Tuesday, with the US Dollar Index closing the fifth straight day in negative territory. Producer Price Index (PPI) data for September will be featured in the US economic docket and several Federal Reserve (Fed) officials will be delivering speeches. Market participants will continue to pay close attention headlines surrounding the Israel-Hamas conflict. Finally, the Fed will release the minutes of the September policy meeting.

FOMC Minutes Preview: Reinforcing higher for longer.

Dovish comments from Fed policymakers and the improvement seen in risk mood made it difficult for the USD to find demand on Tuesday. Wall Street main indexes closed in postive territory and the benchmark 10-year US Treasury bond yield closed the late little changed at 4.65%. In the European morning, 10-year yield holds steady near Tuesday's closing level and US stock index futures trade flat.

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 weakest against the New Zealand Dollar.

	USD	EUR	GBP	CAD	AUD	JPY	NZD	CHF
USD		-0.40%	-0.49%	-0.56%	-0.88%	-0.21%	-0.97%	-0.49%
EUR	0.38%		-0.10%	-0.16%	-0.49%	0.18%	-0.57%	-0.09%
GBP	0.51%	0.12%		-0.03%	-0.40%	0.27%	-0.47%	0.03%
CAD	0.55%	0.15%	0.05%		-0.32%	0.31%	-0.42%	0.08%
AUD	0.87%	0.51%	0.39%	0.36%		0.69%	-0.08%	0.43%
JPY	0.21%	-0.21%	-0.31%	-0.31%	-0.76%		-0.80%	-0.25%
NZD	0.97%	0.59%	0.49%	0.43%	0.08%	0.75%		0.49%
CHF	0.45%	0.08%	-0.04%	-0.08%	-0.43%	0.22%	-0.51%

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).

Israeli airstrikes continued for the fifth straight day following Hamas' suprise attack. In a press conference late Tuesday, US President Joe Biden called the Hamas attacks "an act of sheer evil" and announced that they were rushing additional military assistance to Israel. In the meantime, US Defense Secretary Lloyd Austin said that they have sent a carrier strike group to the eastern Mediterranean Sea.

EUR/USD touched its highest level in two weeks above 1.0600 on Tuesday before going into a consolidation phase near that level early Wednesday. The data from Germany confirmed that the annaul Consumer Price Index (CPI) rsoe 4.5% in September.

GBP/USD climbed above 1.2300 for the first time since September 21 during the Asian trading hours on Wedensday but retreated below that level by the European morning.

Despite the broad USD weakness, USD/JPY fluctuated in a tight channel on Tuesday and closed the day virtually unchanged. Early Wednesday, the pair continues to move sideways slightly below 149.00.

Following Monday's upsurge, Gold price staged a technical correction and declined toward $1,850 on Tuesday. With the US yields holding steady, however, XAU/USD managed to find support. At the time of press, the pair was trading modeslty higher on the day slightly above $1,860.

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.

GBP/USD: Daily gains remain capped by 1.3650

GBP/USD leaves behind Monday’s pessimism and advances marginally on Tuesday. Cable’s humble gains, however, appear to have met quite a decent resistance in the 1.3650 zone for now, in a context of a slight selling pressure hovering around the Greenback.

EUR/USD struggles to regain pace; gyrates around 1.1670

EUR/USD clinches humble gains around 1.1670 following Tuesday’s close on Wall Street. Indeed, marginal losses in the US Dollar encourages spot to set aside two dauly pullbacks in a row and maintain the 1.1700 barrier on the cross-hairs for now. Moving forward, US inflation tracked by the PCE and another revision of Q2 GDP data should keep investors entertained on Wednesday.

Gold: Buyers still hold the grip

Gold navigates the middle of its daily range near $4,650 per troy ounce on Tuesday. The lack of clear direction in the yellow metal comes on the back of the widespread cautious tone among market participants, a mildly offered stance in the US Dollar and a marked decline in US Treasury yields across the curve.

Australia CPI expected to show inflation easing in July

The Australian Bureau of Statistics (ABS) will publish the July Consumer Price Index (CPI) on Wednesday at 01:30 GMT. The report is expected to show that inflation rose 3.2% from a year earlier, easing from the 3.8% posted in June. The monthly CPI, however, is forecast at 0.8% following the -0.1% print from the previous month.

Canada hits US goods with tariffs; The rate market sees a problem

On September 8, Canada begins charging its own importers 15%, 25% and 50% on roughly 700 lines of American goods. The measure is billed as dollar for dollar, and on the arithmetic of covered trade it is. What it is not is a tax on the United States.