Eyes remain on the Middle East. During the Asian session, the Australian Westpac Consumer Confidence Index and the NAB Business Conditions survey are due. The key report of the week will be the US CPI on Thursday.
Here is what you need to know on Tuesday, October 10:
The US Dollar Index experienced a modest decline near the 106.00 level on Monday, after trading mostly in positive territory throughout the day. The DXY initially started the week on a positive note due to developments in the Middle East that impacted market sentiment. However, the Greenback lost momentum later in the day as the market stabilized and US yields continued to decline.
On Tuesday, no top-tier reports from the US are scheduled for release. The focus for the week in terms of economic data will be on inflation figures, with the Producer Price Index (PPI) on Wednesday and the Consumer Price Index (CPI) on Thursday.
Analysts at ANZ on US CPI:
The outsized payroll number raises the prospect the Fed may hike again, but it’s not a clincher. September Consumer Price Index data out this week should be more revealing. We expect core inflation to rise by 0.2% m/m, which should be well received by the Fed.
The situation in the Middle East has the potential to impact markets, with further escalation possibly damaging market sentiment and increasing demand for safe haven currencies and crude oil prices. The unfolding events could become a "Black Swan" event that significantly alters the outlook.
The Japanese Yen was among the best-performing currencies, supported by the decline in global bond yields. German 10-year yields dropped by almost 5% to 2.76%. USD/JPY declined from below 149.00 to 148.35.
EUR/USD trimmed its losses during the American session, rising above 1.0560. The pair maintains a modest bullish bias in the short term but remains limited below 1.0600. The Euro underperformed on Monday and was the weakest among G10 currencies. German Industrial Production dropped 0.2% in August, and Eurozone Sentix Investor Confidence declined to -21.9, against an expected -24.
GBP/USD finished flat consolidating around the 1.2240 area, supported by some weakness in the US Dollar. The pair remains below but near the 20-day Simple Moving Average (SMA) at 1.2270.
AUD/USD gained momentum late on Monday, rising above the 20-day SMA and surpassing 0.6400. On Tuesday, the Westpac Consumer Confidence for October and the National Australian Bank's Business survey are scheduled.
The rally in crude oil prices boosted the Canadian Dollar. USD/CAD dropped for the third day in a row, reaching a one-week low below 1.3600.
NZD/USD registered its highest daily close in almost two months, above 0.6000. The weaker US Dollar and improved risk sentiment supported the pair's strength on Monday.
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD eases toward 1.0700 as USD finds feet ahead of ADP, Fed Minutes
EUR/USD is retreating toward 1.0700 in the early European session on Wednesday. The pair struggles, as the US Dollar finds its feet in the aftermath of the dovish Fed Chair Powell's comments. Cooling EU inflation keeps the Euro undermined. Eyes turn to US ADP data, Fed Minutes.
GBP/USD flatlines below 1.2700, looks to US data/Fed minutes
GBP/USD is lacking a firm directional bias below 1.2700 on Wednesday, reversing early gains. Traders appear reluctant and prefer to wait on the sidelines ahead of the FOMC minutes while the UK elections on Thursday also keep them on the edge. US ADP data eyed as well.
Gold eyes a range breakout, as Fed Minutes looms
Gold price is trading around a flatline near $2,330 early Wednesday, as traders consider the recent US jobs data and Federal Reserve Chairman Jerome Powell’s speech, bracing for yet another busy US calendar.
Bitcoin struggles around $64,000 level
Bitcoin faces resistance near the $64,000 daily level, leading to a 1.05% decline in trading on Wednesday. Ethereum and Ripple similarly encounter resistance, resulting in 1% and 0.5% declines, respectively.
UK election update: Labour slips in the polls, but remains trusted with the economy
With one day left before the election, the polls suggest that it will be an easy win for Labour, the question is the magnitude of their victory. The final polls before election day have seen support for Labour slip.