Anna 
Risk appetite prevailed in financial markets on Monday, leading to a decline in the U.S. dollar against other major currencies following a robust start for American stocks. The greenback, however, managed to maintain its position as caution loomed over early Tuesday trade, with investors anticipating the release of U.S. retail sales and industrial production data for the month of September. Furthermore, the day featured several federal policymakers scheduled to address the financial landscape.
Despite mounting geopolitical concerns, major U.S. stock indices recorded significant gains on Monday. As the European trading day commenced, U.S. stock index futures displayed a slight dip. Reports regarding the Israel-Hamas conflict noted heavy bombardment in southern Gaza, specifically in Khan Younis, Rafah, and Deir al-Baila. Meanwhile, U.S. President Joe Biden is set to embark on a visit to Israel on Wednesday. Lieutenant Colonel Jonathan Conricks, an international spokesman for the Israel Defense Forces, reassured that Biden’s visit would neither complicate nor delay ground operations in Gaza.
The USD/CAD pair concluded Monday deeply entrenched in negative territory and remained relatively steady just above the 1.3600 level early on Tuesday. Market participants are keenly awaiting the release of consumer price index (CPI) data for September by Statistics Canada, as well as the core inflation data from the Bank of Canada (BOC).
During the Asian trading session on Tuesday, New Zealand unveiled third-quarter inflation data, as measured by changes in the consumer price index (CPI). The figures showed a rise to 1.8% from the previous quarter’s 1.1%. Nevertheless, this outcome fell below market expectations of 2%. Subsequently, the NZD/USD currency pair faced significant downward pressure, with current trading levels around 0.5900, marking a 0.5% decline for the day.
The Reserve Bank of Australia (RBA) released minutes from its October policy meeting on Tuesday. These minutes revealed that policymakers deliberated the possibility of implementing a further 25-basis point interest rate hike or maintaining the status quo. Ultimately, they opted to keep rates unchanged. As a result, the AUD/USD pair garnered traction during the Asian session, rising above the 0.6350 level.
EUR/USD witnessed a higher close on Monday but encountered challenges in extending its rebound. The currency pair entered a consolidation phase early in European trade, hovering around the 1.0550 level.
On Tuesday, the Office for National Statistics reported that annual wage inflation in the United Kingdom, measured by changes in average earnings (excluding bonuses), declined from 7.9% in July to 7.8% year-on-year in August. Consequently, the GBP/USD pair faced slight downward pressure and was last seen down 0.3% on the day at 1.2175.
USD/JPY encountered difficulty making substantial progress in either direction on Monday and continued to trade sideways, primarily around the 149.50 level early on Tuesday.
Despite a weaker U.S. dollar on Monday as U.S. Treasury yields increased, gold experienced a decline. Gold/USD consolidated its losses near $1,920 on Tuesday, while the 10-year U.S. Treasury yield maintained its intraday gains near 4.75%.
