Forex Today: US inflation comes to the fore

Fresh downside pressure has weighed on the US Dollar (USD) on Tuesday, prompting it to recede from Monday’s fresh highs. The Greenback’s correction comes amid declining crude oil prices and mixed US Treasury yields as investors gear up for key data releases on Wednesday.

Here is what you need to know on Wednesday, October 14:

The US Dollar Index (DXY) has set aside two daily advances in a row on Monday, slipping back to the 102.20 region amid steady pre-US CPI caution. The Inflation Rate will be the main focus, followed by the usual MBA Mortgage Applications, the Fed Beige Book, and the API’s weekly report on US crude oil inventories. In addition, the Fed’s Bowman and Barkin are due to speak.

EUR/USD had taken advantage of the US Dollar’s offered stance, managing to bounce off recent lows near 1.1150 and challenge the 1.1200 barrier. Germany’s Wholesale Prices will be the sole release on the domestic calendar. The ECB’s Lagarde is also due to speak.

GBP/USD has climbed to as high as the 1.3250 zone, just to recede a tad afterwards amid the widespread upbeat tone in the risk complex. The BoE’s Bailey and Pill will speak in an otherwise empty docket across the Channel.

Further range-bound trade has seen USD/JPY navigating the low 158.00s, while at the same time disputing its key 200-day SMA. Next on tap in Japan will be Machinery Orders data, the weekly Foreign Bond Investment readings, the Capacity Utilisation gauge and the final readings of the Industrial Production, all due on October 15.

AUD/USD has further extended its choppy trade, this time coming closer to the key 0.7000 threshold. The Westpac Leading Index is only due in Oz.

Front-month WTI futures have added to the ongoing recovery, up for the fourth day in a row and approaching the $95.00 mark per barrel, despite cooling tensions in the US-Iran-Hormuz conflict.

Gold has added to Monday’s decline, meeting some contention near the $4,150 mark per troy ounce in a context of a weaker US Dollar and mixed US Treasury yields across the curve.