[MARKET ANALYSIS] DXY gets some reprieve after recently weakening on softer inflation metrics
Newsquawk Staff ·
DXY: Flat
- Gets some slight reprieve from the recent data-induced selling pressure in which the DXY weakened against its major peers and money markets shifted to just about pricing one 25bps rate hike by year-end, after PPI followed suit to the recent CPI data and printed beneath expectations on all watched gauges. In terms of Fed rhetoric, Williams said current policy is well-positioned to bring inflation back to the 2% target, but didn't have a clear direction about which way interest rates are going or when, while Fed Chair Warsh largely reiterated comments during the second day of his Congress testimony, including commitment to the inflation target, and described the labour market as in good shape. Elsewhere, geopolitical developments had little bearing on FX price action given the changes in the inflation dynamic, and as little has changed regarding the Middle East, with Trump hinting that strikes will continue into next week.
EUR/USD: Flat
- Holds on to recent spoils after climbing on the back of a weaker dollar, although further upside in the single currency was capped and comments from several ECB speakers did little to shift the dial.
GBP/USD: -0.1%
- Marginally pulled back after yesterday's outperformance, which seemingly coincided with reports that the UK's incoming PM is expected to name current Home Secretary Mahmood as Chancellor, as markets believe that Mahmood would be fiscally conservative given her history in the current ministerial role, while participants look ahead to monthly GDP and output data.
USD/JPY: Flat
- Trades rangebound at the 162.00 handle in the absence of any tier-1 data and with little reaction seen to the familiar jawboning from Japanese Finance Minister Katayama, who reiterated that they will take appropriate action on FX anytime as needed.
Antipodeans: AUD/USD -0.1% / NZD/USD -0.1%
- Price action is lacklustre amid the mixed risk appetite and quiet overnight calendar.
- [MARKET ANALYSIS] Crude benchmarks edge higher as the geopolitical environment remains tense
- [MARKET ANALYSIS] DXY is a touch firmer, Kiwi gains whilst the JPY digests further BoJ source reports
- French Trade Minister has requested a tariff exemption covering cognac and champagne within the US
- Israeli PM Netanyahu says "I have instructed the security forces to impose a siege on the city of Hebron and to completely close off the West Bank"
- Newsquawk Daily European Opening News - 23rd October 2026
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