Forex Today: Focus on Powell and pre-PCE data

The Dollar rebounded strongly after flirting with 14-month lows, triggering a significant reaction in the risk complex ahead of key data releases and Chairman Powell’s speech.

Here’s what you need to know on Thursday, September 26:

The US Dollar Index (DXY) rose sharply after touching fresh 2024 lows around 100.20. Final Q2 GDP Growth Rate figures are expected, followed by the usual weekly Initial Jobless Claims, Durable Goods Orders, and Pending Home Sales. Additionally, Kugler, Barr, Kashkari, Collins, Williams, and Fed Chair Powell are expected to speak.

EUR/USD failed to advance beyond the 1.1200 barrier and eventually succumbed to the sharp reversal of the US Dollar. Germany’s GfK Consumer Confidence is expected along with the ECB’s M3 Money Supply. In addition, ECB’s Elderson, Buch, Schnabel, McCaul and Lagarde will also speak.

GBP/USD rose beyond the 1.3400 figure, although the move failed to consolidate and the pair corrected sharply lower in line with the Dollar’s rebound. Auto production will be the only release on the UK calendar.

The strong recovery of the US dollar and US yields in general motivated the USD/JPY to leave behind two consecutive daily declines and retest the upper 144.00 zone. The BoJ will publish its minutes, while the weekly data on foreign investment in bonds is also expected.

After a brief breach of the 0.6900 barrier, the AUD/USD started a deep decline following a strong rebound in the Dollar. The RBA will publish its Financial Stability Review (FSR).

WTI prices came under heavy pressure and fell to fresh four-day lows well south of the $70.00 per barrel mark.

Gold prices hit an all-time high around $2,670 per troy ounce amid strong speculation of additional rate cuts by the Fed in the coming months. Silver retested the zone of recent highs beyond the $32.00 per ounce mark, though later succumbed to the broad buying bias in the US Dollar.