Euro buckles under selling pressure

The Euro (EUR) encounters selling pressure in its exchange with the US Dollar (USD), resulting in EUR/USD declining to the 1.0550 area on Wednesday.

Meanwhile, the Greenback maintains its position in the low 106.00s, as measured by the USD Index (DXY), amid the overall indecisive price movement in global markets. This occurs amidst a prevailing cautious sentiment due to escalating geopolitical risks.

Continuing to centre attention on monetary policy, investors anticipate that the Federal Reserve (Fed) will uphold its position of not touching interest rates throughout the remainder of the year. Meanwhile, participants in the financial markets contemplate the possibility of the European Central Bank (ECB) halting policy modifications, despite inflation levels surpassing the bank's target and mounting concerns about the potential for an economic downturn or stagflation in the region.

On the domestic calendar, the final Inflation Rate for September in the broader Eurozone saw the CPI rise 4.3% YoY and 4.5% YoY when it came to the Core CPI (consumer prices excluding food and energy costs).

Data-wise, in the US, the usual weekly Mortgage Applications tracked by MBA contracted 6.9% in the week to Ocotber 13, while Housing Starts increased 7% MoM in September (1.358M units) and Building Permits contracted 4.4% MoM (1.473M units). In addition, the Fed’s Beige Book and TIC Flows are also due.

Additionally, markets’ attention will also be on speeches by FOMC Governor Christopher Waller (permanent voter, centrist), NY Fed President John Williams (permanent voter, centrist), FOMC Governor Michelle Bowman (permanent voter, hawk), and Philly Fed President Patrick Harker (voter, hawk).