Forex Today: US data and geopolitics remain central to market attention

A subdued mood ahead of the Fed has left the US Dollar (USD) without a clear direction, as attempts to reverse its weekly correction struggled to gain traction. Market participants continued to weigh developments on the geopolitical front.

Within a narrow 101.80-101.60 band, the US Dollar Index (DXY) has swung between gains and losses. On the data calendar, the regular weekly Initial Jobless Claims release is due alongside the CB Leading Index.

With currency markets broadly lacking direction, EUR/USD has edged lower towards the 1.1200 support zone. Attention on the domestic calendar now turns to the euro area’s flash Consumer Confidence reading and a speech by the ECB’s Panetta.

A brief move above the 1.3400 barrier has left GBP/USD modestly higher on the day, extending Tuesday’s gains. Across the Channel, forthcoming releases include the CBI Business Optimism Index and CBI Industrial Trends Orders.

Further selling pressure has pushed USD/JPY back below 158.00, extending the previous day’s fall. Japan’s weekly Foreign Bond Investment figures are next on the calendar.

A fourth consecutive day of gains has taken AUD/USD further above the 0.7000 level following its recent breakout. Australia’s next scheduled releases are the preliminary S&P Global Manufacturing and Services PMIs on October 23.

Persistent hopes for a diplomatic resolution to the US-Iran confrontation have kept front-month WTI futures under additional selling pressure, with prices trading close to $96.00 per barrel.

A marginally weaker US Dollar and mixed US Treasury yields across the curve have been followed by a recovery in Gold. The yellow metal has regained some stability and posted reasonable gains, testing $4,150 per troy ounce once more.