Forex Today: US Dollar retreats from 17-month high as bond yields, oil prices ease
Here is what you need to know on Tuesday, October 13:
The US Dollar Index (DXY) retreats from a 17-month high to around 102.35 after a holiday in some US markets. Yields on the 10-year Treasury bond ease, while oil prices drop. The US ADP Employment and Existing Home Sales data will be released later in the day. Attention will shift to the US Consumer Price Index (CPI) inflation report on Wednesday, followed by Producer Price Index (PPI) and Retail Sales data on Thursday. These reports could provide further direction on the Federal Reserve’s (Fed) policy path.
Markets are now pricing in nearly an 80.6% probability that the US central bank will hold rates steady in its October policy meeting, but are pricing in an 84.7% odds of an increase at the final meeting of the year in December, according to the CME FedWatch tool.
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 Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.21% | -0.14% | -0.32% | -0.11% | -0.09% | -0.21% | -0.24% | |
| EUR | 0.21% | 0.06% | -0.12% | 0.11% | 0.11% | 0.01% | -0.03% | |
| GBP | 0.14% | -0.06% | -0.21% | 0.00% | 0.04% | -0.09% | -0.09% | |
| JPY | 0.32% | 0.12% | 0.21% | 0.21% | 0.22% | 0.09% | 0.09% | |
| CAD | 0.11% | -0.11% | 0.00% | -0.21% | 0.02% | -0.12% | -0.12% | |
| AUD | 0.09% | -0.11% | -0.04% | -0.22% | -0.02% | -0.13% | -0.15% | |
| NZD | 0.21% | -0.01% | 0.09% | -0.09% | 0.12% | 0.13% | 0.00% | |
| CHF | 0.24% | 0.03% | 0.09% | -0.09% | 0.12% | 0.15% | -0.00% |
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).
Traders assessed the prospect of increased diesel supplies from Russia as hopes for an energy ceasefire between Moscow and Kyiv remained uncertain, despite US President Donald Trump’s announcement. Ukrainian President Volodymyr Zelenskiy said on Monday that Russian forces had struck at least six energy facilities during deadly airstrikes across Ukraine.
Meanwhile, the Saudi-led coalition fighting Yemen’s Iran-backed Houthi rebels reported that it was responding to another wave of drone and missile attacks targeting Saudi Arabia.
According to the Reserve Bank of Australia (RBA) Minutes, board members discussed the challenges of judging how large the upside risks to inflation were or could become after hiking the Official Cash Rate (OCR) to 4.6%. The board will do what’s needed to meet its mandate, “including increasing the cash rate target further if required.”
The International Monetary Fund (IMF) raised the 2026 world economic growth outlook to 3.1% from 3.0% in July, with strong AI investment offsetting the energy shock from the Middle East war. The IMF projected 2027 world GDP growth to be unchanged at 3.4% and warned of “resilience under strain."
Oil shock fades but bond volatility persists as HSBC flags limits to relief
Strategists at HSBC Asset Management argue that “one of the major factors behind 2026’s bond market shock has been the surge in oil prices caused by the Iran conflict.” They note that this linkage was clearly visible earlier in the year, with “overlapping movements between implied measures of bond and oil market volatility as measured by the MOVE and oil VIX indices, respectively.” However, HSBC highlights that “what’s interesting is the recent disconnection between these volatility measures: bond markets have continued to sell off and remain choppy even though oil prices have settled.” In their view, “the initial leg higher in yields has created its own problems,” and with “hyperscaler debt issuance likely to remain massive, investors shouldn’t expect falling oil prices to be a silver bullet” for reversing bond market weakness.
EUR/USD rebounds from a 17-month low to 1.1175 in the European morning. Traders brace for Germany’s Harmonized Index of Consumer Prices (HICP) and speeches by European Central Bank (ECB) members Elderson, Escriva and Lane.
GBP/USD gathers strength to around 1.3225 on Tuesday. Bank of England (BoE) policymaker Megan Greene is set to speak later in the day.
USD/JPY softens to near 158.20 in the European session on Tuesday. The Statistics Bureau of Japan revealed on Tuesday that Japan's wholesale prices rose 6.8% YoY in September, versus 7.6% prior. This figure was slower than the previous month but indicated mounting inflationary pressure that keeps alive market expectations of a near-term interest rate hike.
Gold edges higher to near $4,200 on Tuesday as crude oil prices ease. Inflows into gold-backed ETFs have reached a four-year high, according to data compiled by Bloomberg.
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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