Forex Today: US Dollar falls back as market sentiment rebounds, US Retail Sales in the pipe

The US Dollar eased back in Monday's trading as market sentiment improved ahead of Tuesday's trading session. Asia markets kick things off with the latest round of the Reserve Bank of Australia's Meeting Minutes; in the European trading window, UK wages will drop, to be followed by the start of the EU's latest EcoFin meetings and a reading of the ZEW Economic Sentiment Survey for October, and the US market session has US Retail Sales and Canadian CPI inflation data.

Here is what you need to know on Tuesday, October 17th:

Markets turned moderately risk-on for Monday's trading, sending the USD back into last week's range as investors gear up for a decent dose of releases on the economic calendar for Tuesday.

The US Dollar Index (DXY) slipped around 45 points to end the trading day near 106.20, down 0.42% heading into Tuesday's market session.

The NY Empire State Manufacturing Index for October printed to the downside as markets broadly anticipated, but still came in above forecast, printing at -4.6 against the expected -7, but still a decline from the previous reading of 1.9.

Next up for the US Dollar (USD) will be Tuesday's Retail Sales for September, with the month-over-month figure forecast to decline from 0.6% to 0.3%. Economic data for the US continues to soften in the face of an anticipated downturn in the US economy, but declining data continues to land higher than investor forecasts, casting shadows over the certainty of a recession.

Commerzbank on US recession, EUR/USD target:

"We continue to expect the US economy to slide into recession in 2024 and that the Fed will cut its key interest rate by 100 bps in response. However, we have to state that the economic outlook is uncertain. Given that the market has currently priced out this scenario very clearly, too aggressive a forecast would be inappropriate. We are therefore reducing our target in EUR/USD from 1.15 to 1.12."

EUR/USD caught a bounce from Friday's low into 1.0495, and the pair is testing into 1.0560 heading into Tuesday's market session. The EU's EcoFin meetings kick off in Brussels on Tuesday, and markets will be keeping an eye out for any headline statements, while the ZEW Economic Sentiment Survey for October is forecast to improve, albeit slightly, from -8.9 to an even -8.

GBP/USD The Pound Sterling (GBP) rose 0.6% on Monday after catching a lift from last Friday's dip into 1.2122, and the pair is testing into 1.2220 ahead of the UK's latest wages figures. UK Average Earnings Excluding Bonuses for the quarter into August is broadly expected to hold flat at 7.8%, while additional bonuses are seen declining, with Average Earnings (plus bonuses) expected to slip from 8.5% to 8.3% for the same period.

USD/CAD The US Dollar fell 0.35% against the Loonie (CAD) on Monday, dropping steadily from the day's opening bids near 1.3660. Loonie bulls have their eyes set on the 1.600 handle on the USD/CAD pair, heading into a double-header of US Retail Sales and Canadian Consumer Price Index (CPI) inflation figures. Canadian CPI inflation for September is forecast to hold flat at 4%.

AUD/USD is up nearly three-quarters of a percent on the Greenback for Monday, heading into Tuesday's latest Meeting Minutes for the Reserve Bank of Australia (RBA), though with the RBA firmly back on a wait-and-see approach to interest rates, it's unlikely that the Aussie central bank will give investors much to go on, leaving the AUD/USD exposed to broader market flows.

NZD/USD caught an early ride on Monday, and the near-term rebound leaves the Kiwi floating on the topside heading into Tuesday's early reading of NZ CPI inflation. Annualized CPI inflation for the Kiwi last came in at 6% for the second quarter, and Tuesday's 3Q reading is forecast to tick down slightly to 5.9%.

USD/CHF is holding flat against the 0.9000 major handle heading into Tuesday's market session, and a lack of Swiss data on the economic calendar for Tuesday leaves the pair braced for Greenback flows following the upcoming US Retail Sales print.

Gold kicked the trading week off with a 1.3% backslide in early Monday trading falling from the early opening bids of $1,933.24 into a intraday low of $1,908.23, and spot Gold prices have seen only a minor recovery through the day, with the XAG/USD testing $1,920 

US Dollar price today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Australian Dollar.

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 Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

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