US Dollar Weakens as Stocks Rise; Key CPI Data Due Tomorrow

The US dollar experienced a general decline on October 23, 2023, with notable exceptions against the Japanese yen and British pound. The USD gained 0.39% against the JPY and 0.27% against the GBP. Meanwhile, the dollar weakened significantly against the Australian dollar, reversing its trend during the US trading session amid positive risk sentiment.

In particular, the USDJPY rose in the Asian-Pacific trading session, maintaining gains above a crucial swing level of 152.11. The October high remains a target at 153.269. For the GBPUSD, trading occurred below a swing area between 1.3323 and 1.3341, narrowly missing the week’s low of 1.33049 by just five pips. A drop below this level could signal further declines.

US Stocks Surge Amid Risk-On Sentiment

US stock markets saw upward movement as investor confidence surged, driven by risk-on flows and significant gains in quantum technology stocks. The small-cap Russell 2000 Index emerged as the standout performer, climbing by 1.27%. This rally occurred despite the White House’s denial of any immediate plans to invest in the quantum sector.

US Treasury yields also rose, with the ten-year yield surpassing 4.00% once again. This increase in yields reflects a broader trend of rising interest rates and market adjustments.

Attention now turns to the release of the US Consumer Price Index (CPI) data, scheduled for 8:30 AM ET on October 24, 2023. The government will make a special exception to release this data despite the ongoing government shutdown. Analysts expect a core measure increase of 0.4% and a headline increase of 0.3%.

Commodity Prices React to Geopolitical Tensions

In the commodities market, gold prices increased by $27, or 0.66%, reaching $4,125 per ounce. Crude oil prices surged by $3.27 to $61.71 per barrel, following announcements regarding increased sanctions against Russian oil companies.

Bitcoin also experienced a notable rise, climbing approximately $2,000 to reach $109,553 on the day. This increase reflects ongoing volatility and interest in the cryptocurrency market.

Overall, the movements in currency, stock, and commodity markets highlight the interconnectedness of global finance and the influence of geopolitical events on investor sentiment. As the market anticipates the upcoming CPI data, traders remain vigilant for potential shifts in economic indicators.