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AUD/USD consolidates near a two-month low, trading around mid-0.6900s in the Asian session on Thursday amid a bullish US Dollar. The US PCE data tempered October Fed hike bets, though oil-driven inflation fears remain supportive of elevated US bond yields. Meanwhile, Australia's trade surplus shrank sharply in August to AUD495M, having limited impact on the Aussie Dollar and the pair.
USD/JPY is sitting at the top end of its weekly range above 158.00 in the Asian session on Thursday. Despite the softer US PCE data, oil-driven inflation risks keep US bond yields elevated near multi-year highs. Moreover, the US-Iran standoff benefits the safe-haven US Dollar and supports the pair. Broad US Dollar strength counters hawkish BoJ expectations and Japanese intervention risks.
Gold struggles near $4,150 early Thursday, holding the previous day's pullback from $4,220. Oil-driven inflation risks counter softer US PCE data and support elevated US bond yields, undermining the non-yielding bullion. Moreover, geopolitical uncertainty allows the safe-haven US Dollar to retain a bullish undertone, keeping a lid on the commodity.
Traders have moved the next Federal Reserve hike from October 28 to December 9, and the inflation report that added to the move said more about July than August. The government's annual rewrite, published alongside the August Personal Consumption Expenditures Price Index, cut July's core reading, which leaves out food and energy, from 3.3% to 3%.
EUR/USD has fallen to its lowest level since May 2025, but a fresh inflation shock in the Eurozone could give the Euro (EUR) an unexpected lifeline. The pair hit 1.1312 on Wednesday and trades well below the January peak of 1.2082.
