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FOREX: EURUSD Reaches Two-Month Low Following US Inflation Data

FOREX
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  • Stronger-than-expected September inflation data in the US was released alongside higher-than-expected weekly jobless claims and while prompting immediate volatility across currency markets, the mixed figures have left the USD index close to unchanged on Thursday.
  • An initial blip higher on the CPI figures was immediately reversed, echoing the move lower for front end yields in the US. Understandably, this was most notable for USDJPY which after printing 149.55, quickly traded down to fresh session lows of 148.30.
  • While some intra-day volatility remained, this immediate post-data range held in place for USDJPY throughout the remainder of the session. Topside sights are on 150.76, the 50% retracement for the Jul 3 - Sep 16 bear leg.
  • EURUSD’s reaction was not as significant and despite some two way action, the bias remains tilted to the downside for the pair. Late comments from Fed’s Bostic, who effectively closed the door on a 50bp cut in November, assisted EURUSD to the lowest level in two months.
  • The pair briefly reached 1.0900 with 1.0881 marking the next support point, the 76.4% retracement of the Aug 1 - Sep 25 bull leg.
  • Haven demand amid some moderate weakness for equities places the Swiss franc at the top of the G10 leaderboard today, as EURCHF edged back below 0.9400 and sits close to 0.9350 mas we approach the APAC crossover.
  • UK GDP and Canadian employment data headlines the calendar on Friday. US PPI is also set for release.
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  • Stronger-than-expected September inflation data in the US was released alongside higher-than-expected weekly jobless claims and while prompting immediate volatility across currency markets, the mixed figures have left the USD index close to unchanged on Thursday.
  • An initial blip higher on the CPI figures was immediately reversed, echoing the move lower for front end yields in the US. Understandably, this was most notable for USDJPY which after printing 149.55, quickly traded down to fresh session lows of 148.30.
  • While some intra-day volatility remained, this immediate post-data range held in place for USDJPY throughout the remainder of the session. Topside sights are on 150.76, the 50% retracement for the Jul 3 - Sep 16 bear leg.
  • EURUSD’s reaction was not as significant and despite some two way action, the bias remains tilted to the downside for the pair. Late comments from Fed’s Bostic, who effectively closed the door on a 50bp cut in November, assisted EURUSD to the lowest level in two months.
  • The pair briefly reached 1.0900 with 1.0881 marking the next support point, the 76.4% retracement of the Aug 1 - Sep 25 bull leg.
  • Haven demand amid some moderate weakness for equities places the Swiss franc at the top of the G10 leaderboard today, as EURCHF edged back below 0.9400 and sits close to 0.9350 mas we approach the APAC crossover.
  • UK GDP and Canadian employment data headlines the calendar on Friday. US PPI is also set for release.