Forex Today: Choppy action continues as markets assess data, geopolitics

Here is what you need to know on Wednesday, October 18:

Action in financial markets remain mixed mid-week as investors assess the latest macroeconomic data releases and headlines surrounding the Israel-Hamas conflict. Eurostat will release revisions to the September Harmonized Index of Consumer Prices (HICP) figures on Wednesday. In the second half of the day, Building Permits and Housing Starts data will be featured in the US economic docket. Finally, the Federal Reserve will publish its Beige Book.

During the Asian trading hours, the data from China revealed that the real Gross Domestic Product (GDP) expanded at an annual rate of 4.9% in the third quarter. This reading followed the 6.2% growth recorded in the second quarter and beat the market expectation for an expansion of 4.4%. Other data from China showed that Retail Sales increased by 5.5% on a yearly basis while Industrial Production expanded by 4.5%. Both of these figures came in better than analysts’ estimates. AUD/USD and NZD/USD pairs both gained traction in the Asian session and they were last seen rising 0.4% on the day.

US Dollar price this week

The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the weakest against the Australian Dollar.

USD -0.63%-0.38%-0.12%-1.25%0.07%-0.19%-0.50%
EUR0.63% 0.25%0.50%-0.62%0.69%0.44%0.12%
GBP0.37%-0.26% 0.24%-0.88%0.43%0.19%-0.13%
CAD0.12%-0.51%-0.23% -1.13%0.19%-0.07%-0.38%
AUD1.24%0.61%0.87%1.11% 1.30%1.05%0.73%
JPY-0.07%-0.68%-0.45%-0.21%-1.31% -0.26%-0.57%
NZD0.19%-0.43%-0.18%0.07%-1.05%0.26% -0.34%

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 Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

US President Joe Biden is expected to arrive in Israel for a meeting with Prime Minister Benjamin Netanyahu on Wednesday. Following the news of a strike on al-Ahli Arab Hospital in Gaza, Jordan has cancelled a summit with US President Biden and Egyptian President Abdel Fattah el-Sisi. Palestinian authorities said that at least 500 people were dead after an Israeli air raid on the hospital. Speaking to CNN, Lt. Col. Jonathan Conricus of the Israeli Defense Forces denied the claim: “We did not strike that, and that the intelligence that we have suggests that it was a failed rocket launch by the Islamic Jihad, and I want to add, categorically, that we do not intentionally strike any sensitive facilities, any sensitive facilities, and definitely not hospitals.”

US stock index futures trade flat on the day following these developments and the 10-year US Treasury bond yield holds steady above 4.8% after Tuesday’s rally. Meanwhile, the US Dollar Index fluctuates in a tight channel slightly above 106.00.

Inflation in the UK, as measured by the change in the Consumer Price Index (CPI), held steady at 6.7% on a yearly basis in September, the Office for National Statistics (ONS) reported on Wednesday. The Core CPI, which strips volatile food and energy prices, rose 6.1% in the same period, compared to the 6.2% increase recorded in August. GBP/USD‘s reaction to these figures was largely muted and the pair was last seen trading modestly higher on the day at around 1.2200.

EUR/USD registered small gains on Tuesday and continued to edge higher toward 1.0600 early Wednesday.

USD/JPY closed in positive territory slightly above 149.50 on Tuesday but failed to gather momentum in the Asian session on Wednesday.

Gold benefited from upbeat Chinese data and escalating geopolitical tensions mid-week. XAU/USD was last seen trading at its highest level since September 20 at around $1,940.

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