FX Today: Fed Chair Powell, RBA minutes, and UK jobs in focus

Christian Borjon Valencia FXStreet

The US Dollar began the week with gains as depicted by the US Dollar Index (DXY) after US President Donald Trump eased tensions with China, following last Friday’s threats to adding further duties on Chinese goods. Nevertheless, he backpedaled and opened the door for further negotiations, spurring an improving on risk sentiment that pushed US equities higher in the day.

Here’s what to watch on Tuesday, October 14:

The DXY recovered some of last Friday’s losses, is up 0.43% at 99.28 on Trump’s change of rhetoric on China and comments of Treasury Secretary Bessent saying that 100% tariffs do not have to happen, and Trump is on track to meet with Chinese President Xi in Korea. Dovish comments by Philadelphia Fed new President Anna Paulson, capped the Greenback’s advance, to re-test two-month highs of 99.56 hit on October 9. Traders are waiting for Fed Chair Jerome Powell speech on Tuesday.

EUR/USD fell 0.46% as France’s turmoil is set to extend despite efforts of the reappointed Prime Minister Sebastien Lecornu. Reports in French press said the government would present a budget aiming to cut the deficit to 4.7% by the end of 2026. The docket will feature Germany’s inflation figures and a speech by ECB Mario Cipollone.

GBP/USD registers losses of 0.13% and seems poised to consolidate within the 1.3260-1.3370 range on Wednesday. Bank of England Greene said that economic activity is stronger than though a year ago, and that there is a case for higher rates. The UK docket will feature employment figures for September

USD/JPY reclaimed 152.00 as Trump tempered his comments, as an improvement of risk appetite, played against haven FX currencies like the Yen and the Swiss Franc.

AUD/USD steadied on Monday, gaining 0.62% after the Reserve Bank of Australia decided to hold rates unchanged a couple of weeks ago. The release of its meeting minutes will keep traders entertained, during Tuesday’s Asian session, as the pair is back above 0.6500, following last week close at around 0.6474.

Gold prices are poised to end Monday’s session past $4,100 and unless the Fed Chair Jerome Powell strikes a hawkish speech on Tuesday, traders are setting their eyes on $4,150 and beyond. Although major investment banks reviewed their expectations of Bullion prices higher for the next year, it would not be a surprise, that the yellow metal could hit some of those milestones, on the remainder of the year.

Economic Indicator

Fed's Chair Powell speech

Jerome H. Powell took office as a member of the Board of Governors of the Federal Reserve System on May 25, 2012, to fill an unexpired term. On November 2, 2017, President Donald Trump nominated Powell to serve as the next Chairman of the Federal Reserve. Powell assumed office as Chair on February 5, 2018.

GBP/USD remains offered below 1.3600

GBP/USD resumes its decline, reversing Tuesday’s bullish attempt and breaking below 1.3600 the figure on Wednesday. Cable’s marked pullback follows a firm advance in the Greenback as investors continue to assess latest US data as well as the geopolitical landscape.

EUR/USD remains on the back foot around 1.1650

EUR/USD comes under renewed selling interest, slipping back to the mid-1.1600s ahead of the opening bell in Asia. Spot loses momentum on the back of solid gains in the US Dollar in a context of unabated geopolitical tensions and steady caution ahead of key US data releases and Chair Warsh’s speech at the Jackson Hole Symposium on Friday. Looking ahead, the ECB will publish its Accounts on Thursday.

Gold recovers from weekly low; trades above $4,600 on softer USD

Gold attracts some dip-buyers during the Asian session on Thursday, recovering part of the previous day's losses to the weekly low as the US dollar lacks follow-through amid Hormuz optimism and sliding US bond yields. Meanwhile, hot US PCE inflation data keeps Fed rate-hike bets on the table, acting as a tailwind for the buck and capping non-yielding bullion.

Bessent’s bond moves and dollar weaponization strengthen Bitcoin's case

US Treasury Secretary Scott Bessent’s recent actions have strengthened two of the strongest arguments for Bitcoin (BTC), according to Bitwise CIO Matt Hougan. In a late Tuesday note to investors, Hougan highlighted Bessent’s comments on CNBC and the US government’s increasing use of the dollar-based financial system as key developments that could support BTC’s long-term appeal.

60 days to pay: Nvidia is financing its own demand

The Jensen Huang-helmed Nvidia (NVDA) delivered its second-quarter earnings print with its stock roughly 11% beneath the peak it set in May and around 8% beneath where it traded in mid-August, on the day it told the market it would stand behind up to $105 billion of a single customer's rent. Then it beat everything. Revenue of $96.221 billion against a consensus near $92 billion.

Kevin Warsh’s Jackson Hole dilemma: Say too much, too little, or just enough

Kevin Warsh is preparing to deliver his first Jackson Hole speech as Federal Reserve (Fed) Chair on Friday, and expectations extend well beyond whether interest rates will be raised or left unchanged in September.