Forex Today: No surprises expected from the Fed

The US Dollar (USD) has added to Monday’s optimism, advancing to the area of fresh two-week highs on the back of mixed US Treasury yields and the continuation of the pre-Fed cautious stance in the global markets.

The US Dollar Index (DXY) has further extended its recent break above the key 102.00 hurdle, reaching new two-week tops. The FOMC gathering will take centre stage seconded by the usual press conference by Chair Warsh. Data-wise, the usual MBA Mortgage Applications are due, followed by the advanced Goods Trade Balance results, Wholesale Inventories, and the EIA’s weekly report on US crude oil stockpiles.

EUR/USD has come under extra selling pressure, receding toward two-week lows near 1.1130. Germany’s GfK Consumer Confidence gauge will only be released on the domestic calendar.

GBP/USD has retreated for the third day in a row, approaching the key 1.3300 neighbourhood, or five-day lows. The Autumn Budget will be the main focus on the UK docket.

Another firm performance has lifted USD/JPY to the boundaries of the 15800 barrier, hitting three-day highs. Next on tap in Japan will be the usual weekly Foreign Bond Investment figures along with the Consumer Confidence reading, all due on October 29.

AUD/USD has outperformed its risk-related peers, reaching new five-week highs north of the key 0.7000 yardstick. The main focus on the Australian docket will be the release of inflation figures for the month of September.

Front-month WTI futures (December contract) have come under extra pressure, challenging the $99.00 mark per barrel and adding to Monday’s retracement as traders continue to gauge hopes of a diplomatic solution to the US-Iran-Hormuz conflict.

Gold has picked up marked traction, extending Monday’s uptick and reaching three-day highs further north of the key $4,000 mark per troy ounce. Declining crude oil prices along with mixed US Treasury yields appear to have lent some support to the precious metal on Tuesday.