In Europe, the dollar has a stronger bias and is getting closer to JPY150. The majority of emerging market currencies are weaker, such as the South African rand and central European currencies.
Gold has been extending its surge for a fourth consecutive session. It is now above $1980 after settling last week just below $1933. Since the Hamas attacks, it has risen by nearly $150 per ounce.
WTI December is also on the rise for a fourth consecutive session. It was near $86.35 a week ago and is now approaching $90. Over the last two weeks, it has risen by about 10%.
Equities are lower, and given the geopolitical developments, risk-off moves are not surprising.
Tokyo's report from a few weeks ago largely predicted the slight easing of Japan's CPI in September. The headline CPI dropped from 3.2% to 3.0%. This is the lowest CPI reading this year, and the lowest since July 2022. The core rate (excluding fresh foods) fell from 3.1% to 2.8%. The BOJ sets its target rate at 2%.
Remember, that there are two by-elections on Sunday, and Kishida will deliver a major policy speech on the subject of fiscal policy on Monday.
The dollar dropped to new lows in the Powell-induced pullback but found fresh bids just below JPY149.70 where it also found support today.
Powell's comments also boosted the Australian dollar in North America after it dropped in Asia and Europe to below $0.6300. It then recovered in North America and reached almost $0.6360 before it lost steam.
The UK had a bad week. The UK announced that it lost jobs in September for a third consecutive month. However, wage pressures were less than expected in the three-month period from August to September. Today, retail sales fell by 0.9%, or 1% if gasoline is not included. Bloomberg's survey showed that the drop was twice as large as median expectations. Many economists believe that the UK economy stagnated during Q3 and expect the same to happen in Q4.
Sterling's recovery from $1.2090 to $1.2200 was impressive, but as it approached this price new sellers appeared. Yesterday was the only session since US employment data was released on October 6 in which sterling failed to rise above $1.22. Today, it retested its lows from yesterday.
Powell helped the euro reach a five-day peak yesterday near $1.0615. The euro has not yet settled above $1.0600.
The US had a mixed-up week. The main economic data came in stronger than expected. Retail sales, industrial production and business inventories were all strong. But the House of Representatives is still unable to select a speaker, and the Beige Book has picked up growing concerns regarding the economy.
Canada and Mexico will report their retail sales for August today. Bloomberg's median forecast calls for the first decline since March, a 0.1% drop. It is likely that the Canadian economy will be overstated if this prediction comes true. The economy is still almost stagnant.
Before Powell's speech, the US dollar was consolidating gains that brought it to CAD1.3740 yesterday in Europe. The US dollar is quietly consolidating within yesterday's range.