The Dollar Index traded around 102.25 and remained capped below Monday’s 18-month peak near 102.50, despite repeated arguments from Fed officials for further tightening. Futures implied about 20% odds of a hike on 28 October and about 70% for 9 December, while the September 15–16 minutes showed most policymakers still expecting another move by year-end. The median end‑2026 projection of 4.1% points to one more quarter‑point increase from the current 3.75%–4.00%, yet the rates impulse wobbled as the two-year yield slipped to 4.75% from 4.84% and the 10-year eased back towards 5.25%. Markets now pivot to US CPI on 14 October at 12:30 GMT, with core CPI forecast at 0.2% MoM and headline CPI at 0.6% MoM, taking the annual rate to 3.6% from 3.4%.
Sentiment Data and Related Currency Moves
Sentiment data from the University of Michigan showed a preliminary 46.3 reading versus a 47.6 forecast, as year-ahead inflation expectations rose to 4.7% and five-year expectations to 3.5%. The index was more responsive to Canada’s 68.3K job losses, lifting USD/CAD to an 18-month high; the Canadian dollar represents 9.1% of DXY, while the euro’s 57.6% weight left the gauge tied to EUR/USD near 1.1200. Beyond CPI, the Beige Book lands at 18:00 GMT the same day; PPI and retail sales follow on Thursday, with sales forecast up 0.3% after 1.2%. Technical markers cited were resistance at 102.50 then 103.00, and support at 102.00, 101.75 and 101.50, with daily Stoch RSI near 89 and turning lower.
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