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Forex Today: US Dollar stabilizes following CPI-inspired rally

Eren Sengezer FXStreet

Here is what you need to know on Friday, October 13:

The US Dollar (USD) gathered strength against its rivals following September inflation data on Thursday and the USD Index snapped a six-day losing streak. Markets stay relatively quiet early Friday as investors await speeches from central bankers. In the second half of the day, Import and Export Price Index data will be featured in the US economic docket alongside the University of Michigan's Consumer Sentiment Survey for October.

The Consumer Price Index (CPI) in the US rose 3.7% on a yearly basis in September, the US Bureau of Labor Statistics reported on Thursday. This reading matched August's increase and came in above the market expectation of 3.6%. Other details of the report revealed that the annual Core CPI inflation, which excludes volatile food and energy prices, edged lower to 4.1% from 4.3% as forecast. The probability of another 25 basis points Federal Reserve rate hike in December climbed above 30% after this data, according to the CME Group FedWatch Tool. In turn, the 10-year US yield gained traction and the USD outperformed its rivals in the American trading hours.

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

0.31%

0.28%

0.17%

0.86%

0.39%

1.02%

-0.10%

EUR

-0.31%

-0.01%

-0.12%

0.56%

0.10%

0.72%

-0.39%

GBP

-0.28%

0.02%

-0.11%

0.53%

0.12%

0.69%

-0.40%

CAD

-0.17%

0.13%

0.11%

0.67%

0.22%

0.81%

-0.28%

AUD

-0.87%

-0.51%

-0.53%

-0.63%

-0.41%

0.17%

-0.92%

JPY

-0.40%

-0.09%

-0.11%

-0.22%

0.41%

0.55%

-0.51%

NZD

-1.01%

-0.67%

-0.69%

-0.80%

-0.16%

-0.57%

-1.11%

CHF

0.07%

0.41%

0.38%

0.28%

0.92%

0.48%

1.09%

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).

In the early European session, the 10-year US yield stays in negative territory below 4.7% and US stock index futures trade modestly higher.

During the Asian trading hours, the data from China showed that the trade surplus widened to $77.71 billion in September from $68.36 billion in August. On a yearly basis, Imports and Exports both contracted by 6.2% in the same period. AUD/USD showed no immediate reaction to these figures and was last seen moving sideways in a narrow channel slightly above 0.6300.

EUR/USD lost nearly 100 pips on Thursday but found support before testing 1.0500. Early Friday, the pair clings to small daily gains slightly below 1.0550. European Central Bank President Christine Lagarde will be speaking at the International Monetary Fund's annual conference later in the day.

GBP/USD turned south and erased its weekly gains on Thursday. In the European morning, the pair seems to have stabilized near 1.2200. Bank of England Governor Andrew Bailey will deliver a speech at the Institute of International Finance annual meeting.

USD/JPY gathered bullish momentum and climbed above 149.50 on Thursday. The pair spent the Asian session in a tight channel near 149.70 on Friday.

Gold came under bearish pressure and closed in negative territory on Thursday. With US yields starting to edge lower early Friday, however, XAU/USD regained its traction and was last seen trading above $1,875.

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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