The US dollar is moving steadily upward, still on track for a slight increase for the week. The market is awaiting the release of the delayed US inflation figures, and most market participants believe this data is unlikely to derail the Fed's plan to cut interest rates next week.

Trade war concerns have resurfaced. President Donald Trump halted trade talks with Canada after deeming an advertisement misleading about tariffs. The Canadian dollar weakened slightly, but the market's primary focus remains on the Trump–Xi meeting in South Korea next week. The hope is for signs of easing tensions after the face-to-face meeting.

All eyes are also on the US CPI for September, released tonight. Consensus predicts headline inflation will rise by around 0.4% monthly and core inflation by 0.3%. Market participants are almost fully pricing in a Fed rate cut next week, and the possibility of another rate cut in December remains open—but economists warn that uncertainty over tariffs, inflation, and politics could keep the central bank cautious.

In other forex markets, the euro weakened, sterling was flat, and the dollar index was headed for a weekly gain. New US sanctions on Rosneft and Lukoil lifted oil prices, pressuring energy importing currencies like the yen. The yen itself fell to its weakest level in two weeks.

In Japan, core inflation remains above the Bank of Japan's target. Prime Minister Sanae Takaichi is preparing a large stimulus package to help households cope with price pressures. This could make it difficult for the BOJ to raise interest rates anytime soon, leading the market to assess the likelihood of a rate hike this month as still small and pointing to a December hike scenario. (asd)

Source: Newsmaker.id