Forex News
- Gold tumbles after retracing from a $4,146 daily high.
- US Core CPI rises 0.3% MoM, fueling expectations of further Fed tightening.
- US 10-year Treasury yields surge 12 basis points to 5.012%.
Gold (XAU/USD) tumbles during the North American session on Tuesday as Federal Reserve (Fed) officials were hawkish, expecting further tightening following the release of a red-hot inflation report in the United States (US). At the time of writing, XAU/USD trades at $4,021 after peaking near $4,146, down nearly 3%.
Bullion plunges nearly 3% on Fed hawkish rhetoric after stubborn US inflation data
US Consumer Price Index (CPI) in October rose by 0.4% MoM, down from 0.6% but exceeding forecasts of 0.3%. Core CPI, which excludes volatile items and is usually a clearer reading of inflation, expanded by 0.3% MoM, above forecasts of 0.2% and unchanged from September’s print, signaling that the disinflation process is stalling.
Earlier, Fed Governor Christopher Waller said that if core CPI showed an improvement in inflation, he would support a 25-basis-point hike. Nevertheless, if the reading came at 0.3%, he would go for a 50-basis-point increase, as he added: “Hiking only 25 basis points would put our credibility at risk, a risk I am not eager to take.”
Dallas Fed President Lorie Logan echoed some of Waller’s comments. She said that “more rapid rate hikes possibly needed this winter,” adding that the Fed is 50 basis points below a “modestly restrictive level.”
Money markets have fully priced in a 25-basis-point rate hike in December, while the odds of a 50-basis-point rate hike are at 10%, according to the CME FedWatch Tool.
Given the backdrop, Bullion prices collapsed as the US Dollar Index (DXY), which tracks the American currency’s value against six currencies, rose nearly 0.70% to 102.36. US Treasury yields, namely the 10-year T-note yield, soared 12 basis points to 5.012%, as investors grow confident that the Fed’s December rate hike is cooked.
Of note, Oil prices remain almost unchanged amid growing speculation that Washington and Tehran may agree to a ceasefire dealthat could end the conflict, which started by the end of February.
Ahead, the US economic docket will gain traction on Thursday, following the country's Veterans Day holiday, with traders eyeing jobless claims, housing data, and speeches by Fed officials.
XAU/USD technical outlook: Gold price sinks towards $4,000, further downside expected
Given the fundamental backdrop, Gold collapses to a four-day low of $4,015 with sellers eyeing a decisive break below the $4,000 psychological level. Momentum shifted bearishly, as indicated by the Relative Strength Index (RSI), suggesting further downside lies ahead.
For a bearish continuation, Gold must drop below $4,000. In that outcome, a potential move towards the November 4 daily low at $3,919 is likely, followed by the October 30 year-to-date low at $3,870.
On the other hand, if Gold buyers reclaim $4,050, the next area of interest is $4,100. A breach of the latter opens the door for a recovery, with the next key resistance area being the confluence of the 50- and 100-day Simple Moving Averages (SMAs), at $4,185 and $4,200, respectively.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
- Silver slips as stronger-than-expected US inflation lifts the US Dollar and Treasury yields.
- Hawkish Fed comments strengthen expectations of further interest rate hikes.
- XAG/USD trades below its 21-day, 100-day and 200-day SMAs, keeping the bearish outlook intact.
Silver (XAG/USD) comes under heavy selling pressure on Tuesday as stronger-than-expected US inflation lifts the US Dollar (USD) and pushes US Treasury yields higher. At the time of writing, XAG/USD trades around $51.23, down 3.97% on the day.
The US Consumer Price Index (CPI) rose 0.4% MoM in October, above the 0.3% forecast but below September's 0.6% increase. Core CPI, which excludes food and energy, increased 0.3%, matching September's pace and exceeding the 0.2% expected.
Adding to the pressure, Dallas Fed President Lorie Logan said the Federal Reserve (Fed) needs “at least two more 25-basis-point (bps) rate increases” and that it “may be possible to move more rapidly this winter.” Before the release, Fed Governor Christopher Waller said a half-point rate hike may be needed in December if October core CPI comes in “around 0.3% or higher.”
According to the CME FedWatch Tool, traders now see an 89.2% chance of a 25-bps rate hike in December and a 10.8% probability of a larger 50-bps increase. Expectations of further Fed tightening remain a headwind for Silver, as higher interest rates raise the opportunity cost of holding non-yielding assets. Rising US Treasury yields and a stronger Greenback also make the precious metal less attractive to investors.
Technical analysis
On the daily chart, XAG/USD remains under a clear bearish bias as price holds below the 21-day, 100-day and 200-day simple moving averages (SMAs). The Relative Strength Index (RSI) near 38 keeps a weak tone, while the Moving Average Convergence Divergence (MACD) has turned marginally positive, hinting at a modest attempt to stabilize rather than a confirmed bullish reversal.
On the downside, immediate support is seen at the horizontal level near $50, followed by the year-to-date low of $48.62. A break below this level could open the door for deeper losses.
On the topside, initial resistance is aligned at the 21-day SMA around $54, followed by a horizontal barrier at $55. Beyond that, the 100-day SMA at $60.50 and the higher horizontal level at $65 precede the longer-term 200-day SMA near $68.60, which together define a broad overhead supply zone that would need to be reclaimed to ease the prevailing bearish pressure.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.64% | 0.87% | 0.57% | 0.54% | 1.16% | 0.79% | 0.86% | |
| EUR | -0.64% | 0.22% | -0.05% | -0.09% | 0.51% | 0.15% | 0.22% | |
| GBP | -0.87% | -0.22% | -0.30% | -0.31% | 0.29% | -0.08% | -0.00% | |
| JPY | -0.57% | 0.05% | 0.30% | -0.04% | 0.57% | 0.20% | 0.28% | |
| CAD | -0.54% | 0.09% | 0.31% | 0.04% | 0.61% | 0.24% | 0.31% | |
| AUD | -1.16% | -0.51% | -0.29% | -0.57% | -0.61% | -0.37% | -0.29% | |
| NZD | -0.79% | -0.15% | 0.08% | -0.20% | -0.24% | 0.37% | 0.08% | |
| CHF | -0.86% | -0.22% | 0.00% | -0.28% | -0.31% | 0.29% | -0.08% |
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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
- USD/JPY climbs as stronger-than-expected US inflation lifts the US Dollar.
- Dallas Fed President Logan calls for at least two more rate hikes.
- The wide US-Japan yield gap continues to weigh on the Yen.
USD/JPY strengthens on Tuesday as stronger-than-expected US inflation and hawkish remarks from Federal Reserve (Fed) officials lift demand for the US Dollar (USD). At the time of writing, the pair trades around 158.76, up 0.55% on the day.
The US Consumer Price Index (CPI) rose 0.4% MoM in October, above the 0.3% forecast but down from 0.6% in September. Core CPI, which excludes food and energy, rose 0.3%, matching September’s pace and beating the 0.2% forecast. The Bureau of Labor Statistics (BLS) did not publish annual figures for October because of last year’s government shutdown.
The US Dollar Index (DXY) climbs 0.68% to around 102.38, while the benchmark 10-year US Treasury yield rises 12 basis points to reclaim 5.00%.
Dallas Fed President Lorie Logan said the Fed needs “at least two more 25-basis-point (bps) rate increases” and that it “may be possible to move more rapidly this winter.” She said the policy rate is at least 50 basis points below a modestly restrictive level and pointed to inflation pressures beyond wartime energy disruptions.
Before the release, Fed Governor Christopher Waller said a half-point rate hike may be needed in December if October core CPI comes in “around 0.3% or higher.” Traders now assign an 89.2% chance to a 25-bps hike and a 10.8% chance to a 50-bps hike, according to the CME FedWatch Tool.
Meanwhile, the Bank of Japan (BoJ) remains on a gradual rate-hiking path, with its policy rate at 1.25%. The 10-year Japanese government bond yield sits near 2.17%, roughly 283 basis points below its US counterpart. Higher US yields and a firmer US Dollar weigh on the Japanese Yen, while the prospect of further Fed hikes could keep the gap between US and Japanese interest rates wide.
With a light Japanese economic calendar for the rest of the week, USD/JPY traders will focus on remarks from Fed officials and producer price data from Japan on Thursday and the US on Friday.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.63% | 0.88% | 0.56% | 0.52% | 1.11% | 0.75% | 0.88% | |
| EUR | -0.63% | 0.23% | -0.09% | -0.10% | 0.47% | 0.12% | 0.24% | |
| GBP | -0.88% | -0.23% | -0.34% | -0.33% | 0.24% | -0.12% | 0.00% | |
| JPY | -0.56% | 0.09% | 0.34% | -0.02% | 0.56% | 0.19% | 0.32% | |
| CAD | -0.52% | 0.10% | 0.33% | 0.02% | 0.58% | 0.21% | 0.34% | |
| AUD | -1.11% | -0.47% | -0.24% | -0.56% | -0.58% | -0.36% | -0.24% | |
| NZD | -0.75% | -0.12% | 0.12% | -0.19% | -0.21% | 0.36% | 0.13% | |
| CHF | -0.88% | -0.24% | -0.01% | -0.32% | -0.34% | 0.24% | -0.13% |
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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Dallas Federal Reserve (Fed) President Lorie Logan said on Tuesday the Fed will need at least two additional 25-basis-point rate hikes, adding that the Fed is 50 basis points below a “modestly restrictive level.”
In remarks at the 11th joint energy conference hosted by the Federal Reserve banks of Dallas and Kansas City, Logan said that “more rapid rate hikes possibly needed this winter,” and that adjusting policy gradually can reduce the risks that economic activity could deteriorate sharply. She stated that after two rate increases, “it would make sense to pause” to assess what further action might be needed.
Key highlights:
It is clear that Fed needs at least two more quarter-percentage-point rate increases
More rapid rate hikes possibly needed this winter
It may be possible to raise interest rates more rapidly this winter than the US central bank has moved so far
Adjusting policy gradually can reduce the risk that economic activity deteriorates more sharply than necessary
Important to promptly achieve balance in outlook, risks for inflation and employment
Higher bond-market rates signal monetary policy has work to do, not an independent tailwind for activity
After two more rate hikes, it would make sense to pause and assess what further action may be appropriate
Fed policy rate is at least 50 basis points below a modestly restrictive level
Wartime energy disruptions not the only source of price pressures
Accommodative policy is adding to inflationary pressures; the real Fed funds rate is 78 basis points, data suggest
Concerned that higher-than-expected consumer price index means personal consumption expenditures inflation could rise
Labor market is balanced and even tightening a bit
Inflation is trending meaningfully higher than the 2% goal
Economic growth is strong, consumer spending solid, business spending robust
Price pressures are also broader than tariffs, and the broad trend is likely to persist
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.60% | 0.81% | 0.52% | 0.61% | 1.04% | 0.72% | 0.86% | |
| EUR | -0.60% | 0.20% | -0.07% | 0.02% | 0.44% | 0.13% | 0.26% | |
| GBP | -0.81% | -0.20% | -0.28% | -0.18% | 0.23% | -0.08% | 0.05% | |
| JPY | -0.52% | 0.07% | 0.28% | 0.09% | 0.51% | 0.19% | 0.32% | |
| CAD | -0.61% | -0.02% | 0.18% | -0.09% | 0.42% | 0.10% | 0.24% | |
| AUD | -1.04% | -0.44% | -0.23% | -0.51% | -0.42% | -0.31% | -0.19% | |
| NZD | -0.72% | -0.13% | 0.08% | -0.19% | -0.10% | 0.31% | 0.14% | |
| CHF | -0.86% | -0.26% | -0.05% | -0.32% | -0.24% | 0.19% | -0.14% |
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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
In an interview with Bloomberg TV, Bundesbank President Joachim Nagel, also a member of the European Central Bank (ECB) Governing Council, said that “it is rather obvious that we have to increase in December,” cementing the case for a rate hike next month.
Nagel added that the drop in energy prices following the US midterm elections is good news. He stated that market expectations do not drive their decisions at the central bank, but stressed that “we’ll do what’s needed to return inflation to 2%.
Key highlights:
It is rather obvious that we have to increase in December
Drop in energy prices since US midterms is good news
Market expectations important but not driving factor
I don't see a risk of fiscal dominance
We'll do what's needed to return inflation to 2%
France must look at its fiscal challenges
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.37% | 0.49% | 0.46% | 0.38% | 0.75% | 0.48% | 0.56% | |
| EUR | -0.37% | 0.10% | 0.05% | 0.01% | 0.36% | 0.11% | 0.18% | |
| GBP | -0.49% | -0.10% | -0.06% | -0.09% | 0.26% | -0.01% | 0.08% | |
| JPY | -0.46% | -0.05% | 0.06% | -0.04% | 0.32% | 0.04% | 0.13% | |
| CAD | -0.38% | -0.01% | 0.09% | 0.04% | 0.36% | 0.08% | 0.17% | |
| AUD | -0.75% | -0.36% | -0.26% | -0.32% | -0.36% | -0.27% | -0.19% | |
| NZD | -0.48% | -0.11% | 0.01% | -0.04% | -0.08% | 0.27% | 0.09% | |
| CHF | -0.56% | -0.18% | -0.08% | -0.13% | -0.17% | 0.19% | -0.09% |
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 US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
ECB FAQs
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
- GBP/USD drops over 0.40% to 1.3396 as selling pressure intensifies.
- US Core CPI rises 0.3% MoM, exceeding the 0.2% forecast.
- Waller considers a 50-bps hike if Core CPI hits 0.3% MoM.
The Pound Sterling (GBP) dives over 0.40% against the US Dollar (USD) on Tuesday as hot US inflation suggests the Federal Reserve’s (Fed) job is not done. Fed Governor Christopher Waller was hawkish, hinting that a 50-basis-point (bps) hike would be warranted if the core CPI came in at 0.3% MoM, with the data fulfilling his forecast. At the time of writing, GBP/USD trades at 1.3396.
GBP/USD retreats as hotter-than-expected US inflation supports Waller’s case for a larger rate hike
The US Bureau of Labor Statistics (BLS) reported that the Core Consumer Price Index (CPI) for October rose 0.3% month over month, above the 0.2% estimate. Headline CPI retreated from 0.6% in September to 0.4% MoM but remained above the 0.3% forecast.
Governor Waller said that the economy is strong, with a stable labor market, but inflation is too high. He said that if October’s inflation showed an improvement, he would go for a 25 bps rate increase, but if the reading is like the last two months, he would go for a 50 bps increase.
Following Waller’s remarks, the odds of a 25-basis-point rate increase in December rose to 85%, while 55% also expect another increase in January, according to the CME FedWatch Tool.
In the UK, BRC Like-For-Like Retail Sales in October improved from 1% to 1.1% but missed forecasts of 1.2%. Eyes move to the release of the Gross Domestic Product (GDP) figures on Thursday, with estimates that the economy grew 0.7% QoQ in Q3.
Ahead, the US economic docket will feature Initial Jobless Claims, housing data and Fed speakers on Thursday.
GBP/USD Price Forecast: Technical outlook
In the daily chart, GBP/USD trades at 1.3376 and remains capped in the near term, with spot holding beneath a tight cluster of the 50-, 100- and 200-day simple moving averages (SMAs) around 1.3453–1.3457. Price is hovering just above a descending trend-line support region near 1.3375–1.3226, suggesting the pair is consolidating within a broader corrective downtrend, while the Relative Strength Index (14) around 51 hints at neutral but stabilizing momentum rather than a decisive bullish turn.
On the topside, initial resistance is seen at the 200-day SMA near 1.3453, followed closely by the 100-day SMA at 1.3455 and the 50-day SMA at 1.3457, where a sustained break would be needed to ease the current cap and open the way toward the higher ascending trend-line barriers near 1.3700 and 1.3868. On the downside, immediate support is provided by the nearby descending trend line at 1.3375, with the lower trend-line floor around 1.3226 acting as the next key level, where a clear drop below would reinforce the bearish bias and expose deeper losses.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.39% | 0.50% | 0.44% | 0.35% | 0.71% | 0.44% | 0.58% | |
| EUR | -0.39% | 0.10% | 0.07% | -0.03% | 0.31% | 0.05% | 0.18% | |
| GBP | -0.50% | -0.10% | -0.04% | -0.13% | 0.21% | -0.06% | 0.08% | |
| JPY | -0.44% | -0.07% | 0.04% | -0.08% | 0.26% | -0.01% | 0.13% | |
| CAD | -0.35% | 0.03% | 0.13% | 0.08% | 0.35% | 0.08% | 0.22% | |
| AUD | -0.71% | -0.31% | -0.21% | -0.26% | -0.35% | -0.27% | -0.13% | |
| NZD | -0.44% | -0.05% | 0.06% | 0.00% | -0.08% | 0.27% | 0.14% | |
| CHF | -0.58% | -0.18% | -0.08% | -0.13% | -0.22% | 0.13% | -0.14% |
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 British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
- Gold falls, erasing Monday’s gains as hotter-than-expected US inflation lifts the US Dollar.
- US CPI data strengthens expectations of a December Fed rate hike, with markets fully pricing in a 25-bps increase.
- XAU/USD holds above the 20-day SMA near $4,061, while RSI signals neutral momentum.
Gold (XAU/USD) extends its intraday decline on Tuesday after US inflation came in hotter than expected. The metal is down about 2.20%, erasing all of the previous day’s gains as the US Dollar strengthens. At the time of writing, XAU/USD trades around $4,050, down from Monday’s high near $4,148.
The US Consumer Price Index (CPI) rose 0.4% MoM in October, above the 0.3% forecast but down from 0.6% in September. Core CPI, which excludes food and energy, increased 0.3%, the same as in September and above the 0.2% expected. The Bureau of Labor Statistics (BLS) did not publish annual CPI figures for October because of last year’s government shutdown.
The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, climbs above 102.00 after touching an intraday low of 101.49. The stronger-than-expected inflation data reinforced expectations that the Federal Reserve (Fed) will raise rates in December.
Earlier on Tuesday, Fed Governor Christopher Waller said he would “still support a 25 basis point increase” in December even if October inflation cooled. He added that a “half-point Fed rate hike may be needed in December” if October core CPI comes in “around 0.3% or higher.”
Traders now assign an 85.3% chance to a 25-basis-point (bps) hike and a 14.7% chance to a 50-basis-point hike, according to the CME FedWatch Tool. The hawkish Fed outlook remains a headwind for Gold, as higher interest rates raise the opportunity cost of holding the non-yielding metal. A firmer Greenback also makes Gold more expensive for buyers using other currencies.
A Reuters poll conducted November 6-10 showed that all 101 economists expect the Fed to raise rates by 25 bps in December. However, views are divided on what comes next, with 56 expecting December to mark the final hike of the current cycle, while 45 see at least two more increases.
However, a sustained decline in Oil prices could ease inflation pressure and reduce the need for further Fed tightening. West Texas Intermediate (WTI) slips toward $84 a barrel, its lowest level since August 31, and is down more than 15% so far this month. US President Donald Trump said there was “positive momentum” toward ending the war with Iran after talks with Qatar’s prime minister at the White House on Monday.
Technical Analysis: $4,000 level in focus
On the daily chart, XAU/USD keeps a mildly bearish near-term bias as it holds below the 20-day Bollinger simple moving average (SMA) at roughly $4,059 while still confined inside the bands. The Bollinger lower band near $3,900 cushions the downside for now, but the inability to reclaim the mid-band keeps rallies capped.
Momentum is stabilizing, with the Relative Strength Index (RSI) hovering just below the 50 line and Moving Average Convergence Divergence (MACD) firmly positive, yet the Average Directional Index (ADX) near 24 suggests only a modest trend.
On the topside, initial resistance emerges at the 20-day Bollinger SMA around $4,060, followed by the upper Bollinger band near $4,218, with a more significant horizontal barrier at $4,400 limiting any stronger advance. On the downside, immediate support is seen at the psychological $4,000 level. Further losses could expose the lower Bollinger Band near $3,901, followed by the year-to-date low at $3,870.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Inflation FAQs
Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
- USD/CAD gains ground as the US Dollar rebounds following October inflation data.
- Traders price in another Fed rate hike in December after US CPI beats forecasts.
- Canada's weak labour market complicates the BoC's December rate decision.
USD/CAD climbs to its highest level since October 16 on Tuesday as stronger-than-expected US inflation lifts the US Dollar (USD), while falling Oil prices amid hopes for US-Iran diplomacy add further pressure on the Canadian Dollar (CAD). At the time of writing, the pair trades around 1.4167, up 0.34% on the day.
The US Consumer Price Index (CPI) rose 0.4% MoM in October, above the 0.3% forecast but down from 0.6% in September. Core CPI, which excludes food and energy, increased 0.3%, the same as in September and above the 0.2% expected. The Bureau of Labor Statistics (BLS) did not publish annual CPI figures for October because of last year’s government shutdown.
The data reinforced expectations that the Federal Reserve (Fed) will raise rates in December, helping the US Dollar recover about half of the previous day’s losses. The US Dollar Index (DXY) climbs toward 102.00 from an intraday low of 101.49.
Before the release, Fed Governor Christopher Waller said a half-point Fed rate hike may be needed in December if October core CPI comes in “around 0.3% or higher.” Traders now assign an 85.3% chance to a 25-basis-point hike and a 14.7% chance to a 50-basis-point hike, according to the CME FedWatch Tool.
Analysts at MUFG/BTMU suggest that geopolitical developments could play a pivotal role in the policy outlook, arguing that “if there is further progress towards a US-Iran deal to end the conflict, it would help to sustain lower energy prices and ease pressure on major central banks, including the Fed, to keep hiking rates.”
West Texas Intermediate (WTI) slips toward $84 a barrel, its lowest level since August 31, and is down more than 15% so far this month. US President Donald Trump said there was “positive momentum” toward ending the war with Iran after talks with Qatar’s prime minister at the White House on Monday.
Canada is a major crude exporter, so falling Oil prices can cut into export earnings and weigh on the Loonie. Meanwhile, the Bank of Canada (BoC) faces a difficult balancing act between containing inflation and supporting a weakening labour market, clouding the outlook for a December rate hike.
Canada shed jobs for a third straight month in October, according to Statistics Canada data released on Friday. Employment fell by 4.7K, against expectations for a gain of 13.6K.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.33% | 0.46% | 0.51% | 0.33% | 0.73% | 0.40% | 0.58% | |
| EUR | -0.33% | 0.11% | 0.16% | -0.01% | 0.39% | 0.07% | 0.25% | |
| GBP | -0.46% | -0.11% | 0.04% | -0.11% | 0.28% | -0.05% | 0.14% | |
| JPY | -0.51% | -0.16% | -0.04% | -0.17% | 0.23% | -0.10% | 0.08% | |
| CAD | -0.33% | 0.00% | 0.11% | 0.17% | 0.40% | 0.06% | 0.25% | |
| AUD | -0.73% | -0.39% | -0.28% | -0.23% | -0.40% | -0.33% | -0.14% | |
| NZD | -0.40% | -0.07% | 0.05% | 0.10% | -0.06% | 0.33% | 0.19% | |
| CHF | -0.58% | -0.25% | -0.14% | -0.08% | -0.25% | 0.14% | -0.19% |
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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
- The Australian Dollar retreats on Tuesday, giving back some of Monday's gains as the US Dollar regains strength.
- Hawkish comments from Fed officials and hotter US inflation reinforce expectations of another interest rate hike in December.
- China's narrowing trade surplus adds pressure to the Aussie, while investors await crucial US inflation data.
AUD/USD trades around 0.6905 on Tuesday, down 0.31% on the day at the time of writing, as the Australian Dollar (AUD) loses some ground against the US Dollar (USD) following Monday's strong rebound. The Aussie remains under pressure amid rising expectations of further monetary tightening by the Federal Reserve (Fed), while disappointing Chinese trade data weigh on sentiment.
The latest figures from China, Australia's largest trading partner, showed that the Trade Surplus narrowed to $105.28 billion in October from $133.53 billion in September, missing market expectations of $125.8 billion.
Despite the narrowing surplus, Chinese exports and imports continued to expand on an annual basis, suggesting that external trade activity remains resilient. Nevertheless, the weaker-than-expected headline figure provides limited support for the Australian Dollar.
Meanwhile, the US Dollar benefits from increasingly hawkish expectations surrounding the Fed's monetary policy outlook. According to the CME FedWatch tool, markets now assign an approximately 99% chance to a 25-basis-point interest rate hike in December, up from 84% a day earlier.
Fed Governor Christopher Waller reinforced these expectations on Tuesday, stating that “We need to raise rates to put downward pressure on inflation.” He also acknowledged that monetary policy has been less restrictive than previously anticipated.
The US Consumer Price Index (CPI), published by the Bureau of Labor Statistics (BLS) on Tuesday, rose 0.4% MoM in October, exceeding market expectations of 0.3%, although slowing from September's 0.6% increase. Meanwhile, the Core CPI, which excludes volatile food and energy prices, increased 0.3%, above forecasts of 0.2% and matching the previous month's reading. The stronger-than-expected inflation figures reinforce concerns about persistent price pressures in the US economy, strengthening the case for additional interest rate increases.
AUD/USD technical analysis
In the daily chart, AUD/USD trades at 0.6878, maintaining a bearish near-term tone as spot holds decisively beneath the 100-day simple moving average (SMA) at 0.7028 and the 200-day SMA at 0.7056. The pair’s inability to reclaim these medium-term averages suggests rallies remain capped for now, while the Relative Strength Index (14) around 38 hints at subdued momentum consistent with a shallow recovery rather than a sustained uptrend.
On the downside, failure to maintain a foothold above 0.6894 could revive selling pressure, exposing the recent low around 0.6855. A break below this level would bring the March low at 0.6834 back into focus. A decisive move beneath this support could confirm a deeper bearish extension.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
- EUR/USD loses ground on Tuesday as stronger-than-expected US inflation boosts demand for the US Dollar.
- US consumer prices rose 0.4% in October, exceeding forecasts of 0.3%, while core inflation remains elevated.
- Markets now see a 99% chance of a Federal Reserve rate hike in December, reinforcing the monetary policy divergence with the Eurozone.
EUR/USD extends its decline on Tuesday, trading around 1.1190, down 0.28% on the day at the time of writing. The pair slips below the psychological 1.1200 level following the release of stronger-than-expected United States (US) inflation data, which reinforces expectations of further monetary tightening by the Federal Reserve (Fed) and supports the US Dollar (USD).
The US Consumer Price Index (CPI), published by the Bureau of Labor Statistics (BLS) on Tuesday, rose 0.4% MoM in October, exceeding market expectations of 0.3%, although slowing from September's 0.6% increase. Meanwhile, the Core CPI, which excludes volatile food and energy prices, increased 0.3%, above forecasts of 0.2% and matching the previous month's reading.
The stronger-than-expected inflation figures reinforce concerns about persistent price pressures in the US economy, strengthening the case for additional interest rate increases. The US Dollar Index (DXY), which measures the Greenback against a basket of six major currencies, gains 0.3% on Tuesday to trade around 102.00 at the time of press, putting additional pressure on EUR/USD.
According to the CME FedWatch tool, financial markets now assign a 99% chance to a 25-basis-point (bps) rate hike at the Fed's December meeting, compared with 84% just one day earlier. Such a move would bring the federal funds target range to 4.00%-4.25%.
These expectations are consistent with a Reuters survey conducted between November 6 and 10, in which all 101 economists anticipate a 25-basis-point increase at the December 9 meeting. However, uncertainty remains over the subsequent monetary policy trajectory, with 56 respondents expecting December to mark the final increase of the current tightening cycle, while 45 foresee at least two additional hikes.
Fed Governor Christopher Waller also reinforced the prospect of further tightening on Tuesday, indicating that he would support a 25-basis-point increase in December even if inflation moderated. He added that a stronger policy response could be necessary if monthly core inflation remained around 0.3% or higher, suggesting that a 50-basis-point increase should also be considered.
Meanwhile, the Euro (EUR) receives some support from improving sentiment toward European sovereign debt. The yield spread between French and German 10-year government bonds has narrowed to approximately 145 basis points, compared with around 175 basis points at its October peak. Nevertheless, political uncertainty and persistent budgetary challenges in France continue to limit the European currency's appeal.
On the monetary policy front, European Central Bank (ECB) Chief Economist Philip Lane indicated that another interest rate increase in December would be prudent if economic conditions remained broadly unchanged. He also expects Eurozone inflation to finish the year slightly above 4%, with underlying inflationary pressures potentially strengthening.
Despite the ECB's relatively hawkish signals, the stronger US inflation figures and the near-certainty of another Fed rate hike are currently favoring the US Dollar. The widening focus on persistent US price pressures could continue to weigh on EUR/USD as investors reassess the interest rate outlook on both sides of the Atlantic.
EUR/USD technical analysis
In the four-hour chart, EUR/USD trades at 1.1189, keeping a mildly bearish near-term bias as it holds below the 100-period simple moving average (SMA) at 1.1196 and the 200-period SMA at 1.1227. The pair’s inability to reclaim these overhead averages suggests rallies remain capped for now, while the Relative Strength Index (RSI) near 47 hints at fading momentum rather than outright oversold conditions.
On the topside, initial resistance is seen at the 100-period SMA around 1.1196, followed by the 200-period SMA near 1.1227, with a stronger barrier at the recent horizontal cap near 1.1275. On the downside, the next notable support aligns with the horizontal level around 1.1100, where buyers may look to defend the broader range if selling pressure extends.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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