Forex Today: What if the ECB…?

There was no letup for the US dollar’s rally on Wednesday, which extended its gains for a sixth straight day and hit fresh two-month highs even as global yields retreated further.

Here’s what you need to know on Thursday, October 17:

The US Dollar Index (DXY) rose further to multi-week highs above 103.50 on further weakness in the risk complex. Retail sales will be at the center of the debate along with the Philadelphia Fed manufacturing index, the usual weekly initial jobless claims, industrial and manufacturing production, business inventories, the NAHB housing market index and the weekly EIA report.

EUR/USD further extended its multi-day bearish leg and broke below the 1.0900 support with marked conviction. The ECB will decide on rates followed by President Christine Lagarde’s usual press conference. Additional data will include trade balance results and the final inflation rate, along with the ECB’s McCaul speech.

GBP/USD fell noticeably and broke the key 1.3000 support on the back of lower UK inflation data. BoE’s Wood is scheduled to speak.

USD/JPY remained volatile and consistently below the 150.00 barrier, advancing modestly on Wednesday following the Dollar’s gains and dovish comments from the BoJ’s Adachi. The results of the trade balance and the tertiary industry index will be published.

AUD/USD retreated to multi-week lows after breaking the key support at 0.6700, focusing attention on the key 200-day SMA. All attention is focused on the publication of the Australian labor market report.

Declining geopolitical fizz and pervasive Chinese demand concerns further weighed on WTI prices, prompting them to break back below the $70.00 level on Wednesday.

Lower yields and prospects for further easing by central banks gave an additional boost to gold prices, taking them to the all-time high zone around $2,685 per troy ounce. Silver prices added to Tuesday’s advance and rose to six-day highs beyond the $32.00 per ounce level.