FX Today: Focus shifts to inflation in Europe and US ADP, ISM data

Steady jitters around a potential US government shutdown kept the US Dollar under pressure on Tuesday, adding to the ongoing multi-day weakness hurting the currency. In addition, prospects for extra rate cuts by the Federal Reserve also collaborated with the bearish price action.

Here’s what to watch on Wednesday, October 1:

The US Dollar Index (DXY) fell to four-day lows in the 97.70-97.60 band on Tuesday, helped by further downward bias in US yields across the curve. The usual weekly MBA Mortgage Applications are due, prior to the ADP Employnment Change, the ISM Manufacturing PMI, the final S&P Global Manufacturing PMI, Construction Spending, and the EIA’s weekly report on US crude oil stockpiles. In addition, the Fed’s Logan is also due to speak.

EUR/USD extended its recovery for the third straight day, revisiting multi-day highs around 1.1760. The preliminary Inflation Rate in the euro area will take centre stage along with the final HCOB Manufacturing PMI in Germany and the Euroland. Additionally, the ECB’S De Guindos and Elderson are due to speak.

GBP/USD rose to multi-day highs, flirting with 1.3460 in response to the persistent selling mood hurting the Greenback. The Nationwide Housing Prices are expected seconded by the final S&P Global Manufacturing PMI.

Further downward pressure sent USD/JPY back to the 147.70 region, down for the third consecutive day on Tuesday. The Tankan survey will be released, followed by the final S&P Global Manufacturing PMI.

AUD/USD climbed to eight-day peaks, surpassing the 0.6600 hurdle and opening the door to a potential challenge of its YTD tops just over 0.6700. The Ai Group Industry Index is next on tap alongside Commodity Prices, and the final S&P Global Manufacturing PMI.

WTI prices dropped further on Tuesday, this time confronting six-day lows near the $62.00 mark per barrel as traders assessed the likelihood of a potential bigger output hike by the OPEC+.

Gold prices rose further, hitting an all-time high around the $3,870 mark per troy ounce amid prospects for Fed rate cuts and fears over a potential US shutdown. Silver prices corrected lower, halting a three-day positive streak, including a move past the $47.00 mark per ounce, the highest since early May 2011.