FX Analysis – Yield spike on hot retail sales fails to lift USD, AUD outperforms, JPY , NZD.

On Tuesday, despite a significant rise in treasury yields driven by better-than-expected US retail sales figures (which increased by 0.7% month-on-month compared to the expected 0.3%), the US dollar (USD) remained within a narrow trading range. The Dollar Index (DXY) experienced sharp fluctuations, reaching a high of 106.52 initially in response to the retail sales data, but quickly retracing gains and hitting a low of 106.02. Federal Reserve (Fed) member Barkin also commented that the Federal Open Market Committee (FOMC) would have a thorough discussion concerning the possibility of a Fed rate hike at their November meeting. In the coming days, market participants should expect to hear from more Fed speakers, including Chair Powell on Thursday. Additionally, any update on geopolitical events will be closely monitored by USD traders.

AUD and NZD were divergent on Tuesday, with the Aussie the G10 outperformer and the Kiwi the laggard. AUDUSD continuing its bounce off the major support at 0.6286 to rally to a high of 0.6380, helped along by what was seen as hawkish RBA minutes released during the session. NZDUSD on the other hand struggled after a not as hot as expected NZ CPI, NZDUSD dipping to test the October lows at 0.5871 before finding some support..

AUDNZD surged higher, retaking the key 1.07 level and within a whisker of also breaching 1.08

JPY faltered against the USD despite seeing strength early in the session after a Bloomberg report that the BoJ was considering revising their inflation forecasts higher. The surge in the Yen swiftly faded with yield differentials pushing USDJPY higher, to hover just below the 150 “intervention zone”

Check Todays calendar below: