The US Dollar consolidates below 102.00 as markets await October CPI data, while Gold holds above $4,100 and major currency pairs maintain recent gains amid a cautious risk environment.
The Dollar Index lost more than 0.5% on Monday and is consolidating below 102.00 ahead of October CPI, with consensus for a softer core print of 0.2% M/M. MUFG/BTMU argue such an outcome would dampen the Dollar's upward momentum, noting it is running ahead of yield spreads and needs a hawkish surprise to hold strength.
The pair rose more than 0.7% on Monday as the Dollar weakened and is holding sideways above 1.1200 early Tuesday. A softer-than-expected US core CPI would further dampen Dollar momentum, supporting the pair, though it is currently range-bound ahead of the data.
Gold extended its bullish action, rising nearly 1.75% to close at $4,140 on Monday after strong gains the previous week, and holds above $4,100 early Tuesday despite a modest pullback. A soft US CPI print would support the metal by easing rate pressure.
The pair gained 0.7% on Monday, retracing Friday's sharp decline, and holds steady around 1.3450 in the early European session on Tuesday. Continued Dollar weakness would support it, but the upside depends on the US CPI outcome.
The pair lost about 0.3% on Monday and stabilized around 158.00 early Tuesday. The BoJ's Summary of Opinions from the October meeting showed some members advocating additional rate hikes in the near term, a mildly yen-supportive factor against broad Dollar softness.
The US Dollar Index remains under pressure, consolidating below 102.00 after a 0.5% decline on Monday. Investors are cautious ahead of October CPI data, with consensus expecting a 0.2% monthly increase in core inflation. Meanwhile, Gold holds above $4,100 following a 1.75% rally, and major pairs like EUR/USD and GBP/USD maintain gains as market participants await further signals from central bank policymakers.
Markets expect headline CPI of 0.3% M/M and core of 0.2% M/M for October; a soft core print is seen weakening the Dollar, while a hawkish surprise would be needed to maintain its strength.
The pair is consolidating in a tight range as investors avoid large positions ahead of the October US inflation report, after rising more than 0.7% on Monday.
It rose nearly 1.75% to close at $4,140 on Monday and is holding above $4,100 early Tuesday despite a mild correction.
It is holding steady around 1.3450 in the early European session on Tuesday after Monday's 0.7% gain.
From the October monetary policy meeting, some members advocated additional rate hikes in the near term, while others preferred to maintain current policy settings to assess risks around the economy and prices.