Forex Today: US inflation in the limelight

The US Dollar (USD) has partially faded Friday’s strong advance, coming under fresh downside pressure following reignited speculation over a probable US-Iran agreement, which in turn weighed heavily on crude oil prices.

The US Dollar Index (DXY) has started the week on the back foot, returning to the sub-102.00 region amid a slight decline in US Treasury yields across the curve, while investors remained cautious ahead of the release of US inflation data. The NFIB Business Optimism Index is due in the first turn ahead of the ADP Employment Change Weekly, the Inflation Rate, and the API’s weekly report on US crude oil inventories.

EUR/USD has left behind two daily drops in a row, regaining upside traction and challenging the key 1.1200 barrier. The speeches by the ECB’s Cipollone and Lane are due in an otherwise empty domestic docket.

GBP/USD has traded with marked gains along with the rest of its risk-linked peers, reclaiming the area beyond 1.3400 the figure after two straight daily losses. The BRC Retail Sales Monitor is due, followed by the speeches by the BoE’s Lombardelli and Pill.

USD/JPY has kickstarted the week on the defensive, breaking below the 158.00 barrier while extending the multi-day consolidative theme for yet another day. Household Spending data are due alongside Current Account results, Bank Lending prints, and the Eco Watchers Survey.

AUD/USD has set aside two consecutive daily pullbacks, retaking the 0.6900 mark and beyond on the back of the strong improvement in the sentiment surrounding the risk complex. The Westpac Consumer Confidence gauge and the NAB Business Confidence are due next in Oz.

Front-month WTI futures (December contract) have resumed their decline, reversing two daily advances in a row and flirting with the area of multi-week troughs below the $87.00 mark per barrel amid resh optimism around the US-Iran-Hormuz conflict.

Gold has climbed to two-day highs north of the $4,100 mark per troy ounce following the US Dollar’s renewed offered stance, declining US Treasury yields across the curve and another negative day of crude oil prices.