|

Forex Today: US inflation data to drive the action ahead of central bank meetings

Here is what you need to know on Tuesday, December 12:

The US Dollar struggles to find demand early Tuesday as markets await the Consumer Price Index (CPI) data for November. The US Dollar Index stays in negative territory below 104.00 after posting small gains on Monday. The European economic docket will feature ZEW business sentiment survey for Germany and the Eurozone.

The high-yield of the latest 10-year US Treasury note auction that took place late Monday stood at   4.29%, down sharply from 4.51% in the previous auction. The 10-year US T-bond yield fell on this development and closed the day in the red, causing the USD to lose strength against its major rivals. Early Tuesday, the 10-year US yield is down nearly 1% on the day at around 4.2% and US stock index futures trade little changed. Meanwhile, the US Central Command reported that a merchant vessel in the Red Sea was struck by a land-based missile fired by Houthi rebels, causing investors to adopt a cautious stance.

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.

 USDEURGBPCADAUDJPYNZDCHF
USD -0.12%-0.17%-0.23%-0.22%0.25%-0.53%-0.42%
EUR0.11% -0.06%-0.11%-0.11%0.36%-0.42%-0.30%
GBP0.18%0.06% -0.05%-0.06%0.43%-0.35%-0.25%
CAD0.23%0.11%0.04% -0.01%0.48%-0.30%-0.20%
AUD0.22%0.10%0.05%0.01% 0.47%-0.30%-0.19%
JPY-0.25%-0.38%-0.53%-0.48%-0.49% -0.82%-0.68%
NZD0.53%0.41%0.34%0.30%0.29%0.78% 0.11%
CHF0.42%0.30%0.24%0.20%0.19%0.68%-0.10% 

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).

Inflation in the US, as measured by the change in the Consumer Price Index (CPI), if forecast to edge lower to 3.1% on a yearly basis in November from 3.2% in October. The Core CPI, which excludes volatile food and energy prices, is expected to rise 4% in the same period to match the previous increase. 

US CPI Preview: November inflation data looks set to guide Fed last meeting of the year.

The data from Australia showed earlier in the day that the National Australia Bank's Business Confidence Index dropped to -9 in November from -3 (revised from -2) in September. The Business Conditions Index edged lower to 9 from 13. Reserve Bank of Australia (RBA) Governor Michele Bullock said on Tuesday that policymakers are taking a cautious approach with monetary policy and reiterated that they will continue to watch incoming data. AUD/USD gained traction in the Asian session and the pair was last seen testing 0.6600, rising 0.5% on a daily basis.

The UK's Office for National Statistics report on Tuesday that the Employment Change in October was +50K. The ILO Unemployment Rate held steady at 4.2% in the three months to October while annual wage inflation, as presented by the change in the Average Earnings Including Bonus, dropped sharply to 7.2% from 8% in the same period. GBP/USD declined toward 1.2550 with the immediate reaction but managed to hold above that level.

EUR/USD closed the first trading day of the week virtually unchanged and started to edge higher toward 1.0800 early Tuesday.

The renewed USD weakness and the risk-averse market environment caused USD/JPY to turn south early Tuesday. At the time of press, the pair was down more than 0.5% on the day below 145.50.

Gold turned south and declined below $1,980 for the first time in nearly three weeks on Monday. Retreating US yields helped XAU/USD find a foothold and the pair was last seen inching higher toward $1,990.

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.

More from Eren Sengezer
Share:

Editor's Picks

AUD/USD keeps the red near 0.6950 after weak Aussie jobs data

AUD/USD holds losses near 0.6950 on disappointing Australian jobs data, extending the previous day's retracement slide from the monthly high and hitting a fresh weekly low during Thursday’s Asian session. Meanwhile, declining US bond yields drag the US Dollar away from the April 2025 high, touched after Wednesday's hot US CPI, helping limit losses for the currency pair.

USD/JPY slides back below 158.00 as USD reverses post-CPI gains

USD/JPY extends the previous day's pullback from a three-week high, attracting follow-through selling and sliding below 158.00 during Thursday's Asian session. Traders remain on high alert amid speculation that authorities will step in to prop up the Japanese Yen. The US Dollar, meanwhile, reverses Wednesday's hot CPI-led gains to April 2025 highs as US bond yields retreat on China bond-buying talk, further pressuring the pair.

Gold sticks to gains below $4,150 on weak USD; bulls seem hesitant amid Fed hike bets

Gold clings to modest intraday gains through the early European session amid a broadly weaker US Dollar, snapping a three-day losing streak to a one-week low set on Wednesday. The initial aggressive market reaction to hot US consumer inflation figures faded quickly amid expectations that the Fed may not rush to raise interest rates immediately. This led to a further decline in US bond yields, prompting some follow-through USD profit-taking and supporting the non-yielding bullion.

Bitcoin, XRP analyst sentiment jumps as Solana bulls hit 91%: CryptoQuant

Analyst sentiment on Bitcoin, Ethereum, Solana, BNB and XRP has flipped bullish since July, as the top five cryptocurrencies recovered faster and more strongly than during the 2022-2023 market phase, according to CryptoQuant.

US Sept Retail Sales and PPI in focus along with corporate earnings
Asia market update: Bond traders ignore US CPI and focus on equity weakness and AI-credit concerns ahead of TSMC earnings; Kospi circuit breaker triggered for the first time since Jul; CHF and JPY rise on safe-haven demand; US Sept Retail Sales & PPI in focus along with corporate earnings. - Chinese shipping firms collapse amid capacity concerns.
Has Bitcoin really escaped the macro forces it was built to fight?
Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?