Forex Today: US Dollar erases CPI-inspired gains as bond yields slump
Here is what you need to know on Thursday, October 15:
The US Dollar (USD) remains under selling pressure on Thursday and gives back the gains it posted following the hot inflation prints, as Treasury bond yields decline sharply. Later in the day, the US economic calendar will feature weekly Initial Jobless Claims data, alongside September Producer Price Index (PPI) and Retail sales figures.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.50% | -0.41% | -0.22% | -0.18% | 0.45% | -0.34% | -0.57% | |
| EUR | 0.50% | 0.08% | 0.27% | 0.29% | 0.98% | 0.13% | -0.08% | |
| GBP | 0.41% | -0.08% | 0.19% | 0.23% | 0.87% | 0.05% | -0.17% | |
| JPY | 0.22% | -0.27% | -0.19% | 0.02% | 0.68% | -0.16% | -0.37% | |
| CAD | 0.18% | -0.29% | -0.23% | -0.02% | 0.64% | -0.16% | -0.39% | |
| AUD | -0.45% | -0.98% | -0.87% | -0.68% | -0.64% | -0.81% | -1.04% | |
| NZD | 0.34% | -0.13% | -0.05% | 0.16% | 0.16% | 0.81% | -0.24% | |
| CHF | 0.57% | 0.08% | 0.17% | 0.37% | 0.39% | 1.04% | 0.24% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
The US Bureau of Labor Statistics (BLS) reported on Wednesday that annual inflation, as measured by the Consumer Price Index (CPI), climbed to 3.7% in September from 3.4% in August. This print came in above the market expectation of 3.6%. The core CPI, which excludes volatile foor and energy prices, rose by 0.3% on a monthly basis, compared ao analysts' estimate for an increase of 0.2%. With the CME FedWatch Tool's probability of a Federal Reserve (Fed) interest rate hike in October climbing toward 40% with the initial reaction to these data, the USD Index rallied and touched it highest level since April 2025 near 103.00.
Analysts at OCBC note that September US CPI "gave the USD a lift as sticky inflation revived fears of further Fed tightening," with "core CPI rose 0.3% MoM, above the 0.2% consensus and matching August, while headline inflation accelerated to 3.7% YoY." They argue that this "upside surprise keeps the 27-28 October meeting live," although, "given recent Fed guidance, we continue to expect a pause in October, followed by another hike in December."
During the early trading hours of the Asian session, Bloomberg reported that China seems to be moving US securities to non-US custodian banks in other countries, masking its role in financing US deficits. Bloomberg's report further added that Canada’s holdings of US debt securities have grown to nearly $600 billion of Treasuries and bonds despite a tariff war, indicating that China has shifted its holdings to Canada. The benchmark 10-year US T-bond yield declines sharply following this headline and was last seen losing nearly 3% on the day at around 5.1%, while the USD Index was down 0.45% at 102.05.
The data from Australia showed earlier in the day that the Unemployment Rate remained unchanged at 4.7% in September, while Employment Change was -39.2K in this period, worse than the market expectation of -20K. Despite the renewed USD weakness, AUD/USD remains under bearish pressure on disappointing employment data and trades below 0.6950 in the European morning on Thursday, losing about 0.4% on the day.
The UK's Office for National Statistics reported that the Gross Domestic Product (GDP) expanded by 0.1% on a monthly basis in August. This print followed the 0.4% expansion reported in July and came in better the market forecast for a contraction of 0.1%. Other data from the UK showed that Industrial Production and Manufacturing Production increased by 0.8% and 1.2%, respectively, on a monthly basis. GBP/USD gathers bullish momentum and rises 0.5% on the day to trade at around 1.3250 in the early European session.
After coming in within a touching distance of 1.1100 and setting a fresh 17-month low on Wednesday, EUR/USD gains traction and trades above 1.1200 early Thursday, up more than 0.5% on the day.
Gold benefits from gallinf US Treasury bond yields and gains about 1% on the day to trades ner $4,150.
USD/JPY declined to a fresh weekly low at 157.58 during the Asian trading hours on Thursday before staging a rebound. At the time of press, the pair was trading at 158.00, still losing 0.2% on the day. Bank of Japan (BoJ) Board Member Junko Koeda said on Thursday that monetary conditions have remained accommodative in Japan and added that they need to adjust the policu to contain upside inflation risks.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
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