The Fed Governor Lisa Cook crossed the wires on Wednesday and said she is committed to returning inflation to the Fed’s 2% goal while preserving the strength of the labour market.
The Mexican Peso (MXN) prolongs its agony, extending losses by over 0.11% against the Greenback for the third straight day on Wednesday, while USD/MXN continues to trade above the psychological level of 18.00 as the carry trade loses its appeal.
The US Dollar (USD) has traded with marginal gains, coming under pressure following daily tops near 101.50 as investors evaluated softer-than-expected PCE data in August and trimmed some bets on extra tightening by the Federal Reserve (Fed) in the following months.
EUR/USD remains on the defensive on Wednesday as a broadly stronger US Dollar (USD) weighs on the pair, leaving the Euro on track for a loss of more than 2% in September. At the time of writing, EUR/USD trades around 1.1337, close to Tuesday’s low of 1.1312, its weakest level since May 2025.
Gold prices (XAU/USD) retreated on Wednesday, down 0.6%, after US inflation data came in above the Federal Reserve’s (Fed) 2% goal but below estimates, prompting investors to price in a less hawkish central bank than expected. The XAU/USD trades at $4,155 at the time of writing.
West Texas Intermediate (WTI) Oil rebounds on Wednesday and remains on track for a monthly gain of around 5.5%. The lack of progress in US-Iran negotiations to reopen the Strait of Hormuz keeps geopolitical risks elevated, even as Middle East supply conditions improve.
European Central Bank (ECB) President Christine Lagarde said that France’s debt situation is “serious at 120% of GDP and without a path to lowering it.”
European Central Bank (ECB) Governing Council member Isabel Schnabel said Wednesday that high costs are passed through to consumers more quickly when the economy is resilient.
AUD/USD declines 0.41% on Wednesday and trades around 0.6960 at the time of writing, having fully erased its initial rebound following the release of softer-than-expected United States (US) inflation data.
Silver (XAG/USD) trades under pressure on Wednesday even as traders reduce bets that the Federal Reserve (Fed) will raise interest rates again in October following softer-than-expected US PCE inflation data.
The Pound Sterling (GBP) posts solid gains versus the US Dollar (USD) on Wednesday, edging up 0.42% as the latest US inflation figures were below estimates, reaffirming New York Federal Reserve (Fed) President John Williams' comments that the Fed is in no rush to tighten monetary policy.
Societe Generale analysts note China has unveiled targeted support measures, including a 25bp cut to the PBoC’s PSL rate and expanded relending quotas for innovation, technology, agriculture and small businesses.
TD Securities' Macro Research team expects the European Central Bank (ECB) to continue a measured tightening cycle, delivering a final 25bp hike in December and taking the deposit rate to 2.75%, which they see as mildly restrictive.
USD/JPY falls 0.30% on Wednesday and trades around 156.80 at the time of writing, as the US Dollar (USD) comes under selling pressure following softer-than-expected United States (US) inflation data.
EUR/USD holds modest gains on Wednesday as traders assess the latest economic data from both sides of the Atlantic. At the time of writing, the pair trades around 1.1363, up 0.20% on the day, after touching 1.1312 on Tuesday, its lowest level since May 2025.
Deutsche Bank’s Early Morning Reid notes that China’s latest PMI data show a broad-based pickup in activity. The private-sector RatingDog Manufacturing PMI and official manufacturing PMI both strengthened, with the latter returning to expansion. Services and non-manufacturing indices also improved, lifting the composite PMI above 50 and signaling a more supportive backdrop for Chinese equities and growth.
USD/CAD declines 0.08% on Wednesday and trades around 1.4180 at the time of writing, after touching a daily low of 1.4155 in the wake of US inflation data. The pair recovered some losses as investors reassessed the timing of a potential further tightening by the Federal Reserve (Fed).
RaboResearch Global Economics & Markets’ FX Strategy team assesses EUR/GBP in light of UK politics, growth and monetary policy. They note the Pound’s recent support from stronger UK GDP, but expect GBP bulls to stay cautious ahead of the October 28 budget.
Brown Brothers Harriman’s Elias Haddad reports EUR/USD has stabilized after dropping to its lowest level since May 2025, as widening France-Germany yield spreads highlight growing French fiscal concerns.
GBP/JPY rebounds sharply on Wednesday as the British Pound (GBP) strengthens across the board following an upward revision to UK economic growth. At the time of writing, the cross trades around 208.65 after recovering from 206.89 earlier in Asian trading hours, the lowest since December 2025.
Inflation in Germany, as measured by the change in the Consumer Price Index, climbed to 3.3% (preliminary) in September from 2.9% in August, Germany's Destatis reported on Wednesday.
The Euro (EUR) is dropping sharply against the British Pound (GBP) on Wednesday, as UK data has endorsed recent claims by Bank of England (BoE) officials to hike interest rates, while German data disappointed on Wednesday.
EUR/USD has dropped to its lowest level since mid-2025 as the US Dollar (USD) maintains broad-based momentum, propelled by elevated long-dated US Treasury yields and shifting expectations for Federal Reserve (Fed) monetary policy.
The Euro (EUR) is up 0.13% at around 1.1356 against the US Dollar (USD) during the European trading session on Wednesday.
Elias Haddad at Brown Brothers Harriman notes the Australian Dollar is underperforming after a softer August CPI print weighed on RBA cash rate futures. Headline CPI rose less than consensus, while trimmed mean inflation remained steady for a third month.
BBH’s Elias Haddad highlights that Pound gains were supported by an upward revision to UK Q2 GDP, with growth beating both prior estimates and Bank of England (BOE) forecasts.
Gold (XAU/USD) reverses its earlier gains on Wednesday after briefly climbing above $4,200 in reaction to softer-than-expected US Personal Consumption Expenditures (PCE) inflation data. The initial move fades as the US Dollar (USD) trims its losses and US Treasury yields resume their advance.
Annual inflation in the United States (US), as measured by the change in the Personal Consumption Expenditures (PCE) Price Index, held steady at 3.4% in August, the US Bureau of Economic Analysis (BEA) reported on Wednesday.
Employment in the United States' (US) private sector increased by 90K in September, the Automatic Data Processing (ADP) reported on Wednesday. This reading followed the 36K increase recorded in August (revised from 38K) and came in better than the market expectation of 70K.
The Indian Rupee (INR) gains against the US Dollar (USD) after a flat opening on Wednesday.
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