The greenback did not strengthen yesterday in Asian and European turnover despite the deteriorating conditions in the Middle East, but it did rally as North American participants entered the fray. Indeed, the Dollar Index rose from a marginal new four-day low to a marginally new four-day high.
The safe haven bid seen in gold and oil, was reflected in the foreign exchange market by the strength of the Swiss franc, the only G10 currency to appreciate against the US dollar, and the Japanese yen, which lost the least among the others. The dollar is mostly firmer today, though it is in a narrow range against the Japanese yen holding slightly below JPY150. The Australian and New Zealand dollars are leading the losses, following disappointing Australian jobs data and the broad risk-off mood.

Asia Pacific
Japan's exports rose last month on a year-over-year basis for the first time in three months. The 4.3% increase led by auto, and medical supplies.
The dollar drew slightly closer to JPY150. Pressure is not just building on dollar-yen rate but also euro-yen.

The selling pressure in North America yesterday saw the Australian dollar fall through Tuesday's lows after having seen follow-through buying in the local session yesterday. Although an outside day was recorded, the Aussie settled barely above Tuesday's low. Still, follow-through selling today saw the $0.6300 level frayed.
Australia reported disappointing September jobs data. Overall job growth of 6.7k was about a third of expectations, and it lost nearly 40k full-time positions, the most since October 2021.

Europe
On a seasonally adjusted basis, the eurozone's August trade surplus rose to almost 12 bln euros from 3.5 bln in July. Today, the current account surplus was reported, and it was 27.7 bln.
The euro was tagged for about half-of-a-cent in the North American session, taking the single currency slightly through $1.0525. It has held the low today.

Tomorrow, the UK will report retail sales volume, which is expected to have fallen by 0.4%. It would be the second monthly fall in Q3, the first time that has happened this year.
Sterling was turned back from forays above $1.2200 and returned to the lower end of its recent range in the $1.2125-35 area. It settled poorly and follow-through selling has seen it slip to $1.2090.

America
The takeaway from the recent string of data is that US economic activity was particularly robust in Q3. The Atlanta Fed's track is at 5.4% and many banks revised up their Q3 GDP forecasts as well. Still, ahead of Federal Reserve Chair Powell's talk at the NY Economic Club later today, the market has about a 6% chance of a November hike and a little more than a 40% chance of a hike before the end of the year. A week ago, the implied odds were about 8% and around 32% respectively.

Tomorrow's retail sales report (expected to fall by 0.1% after a 0.3% gain in July) is the last important data point ahead of the Bank of Canada meeting on October 25. The softer than expected CPI readings reported on Tuesday dampened the odds of a hike from about a 38% chance at the end of last week to about 15% chance now.
The risk-off mood leaves the Canadian dollar vulnerable, and the US dollar settled above CAD1.37, which blocked the upside in recent days.