Forex Today: US Dollar rally takes a breather as risk mood improves

Here is what you need to know on Wednesday, September 27:

The US Dollar Index went into a consolidation phase above 106.00 early Wednesday after posting gains in the previous three trading days and touching a fresh 2023-high in the process. The modest improvement seen in risk mood makes it difficult for the US Dollar (USD) to continue to outperform its rivals mid-week. August Durable Goods Orders will be featured in the US economic docket and the US Department of Treasury will hold a 5-year Treasury note auction later in the day.

Although the data from the US revealed on Tuesday a further deterioration in consumer sentiment in September and a sharp decline in new home sales in August, the USD managed to hold its ground amid the bearish action in Wall Street. In the European morning, US stock index futures gained traction and they were last seen rising between 0.3% and 0.4%.

Inflation in Australia climbed to 5.2% on a yearly basis in August, the Australian Bureau of Statistics reported in the Asian session. This decision came in line with the market expectation and AUD/USD struggled to gain traction. At the time of press, the pair was trading modestly lower on the day slightly below 0.6400.

USD/JPY continued to edge higher and rose above 149.00 on Wednesday. The Bank of Japan's minutes of the September policy meeting showed earlier in the day that members agreed to maintain current monetary easing to stably, sustainably hit the price target. Meanwhile, Japanese Finance Minister Shunichi Suzuki repeated that they are watching the developments in the foreign exchange market with a sense of urgency.

EUR/USD posted its lowest daily close since February below 1.0600 on Tuesday. Early Wednesday, the pair consolidates its weekly losses above 1.0550.

GBP/USD dropped to a new multi-month low of 1.2136 in the late Asian session on Wednesday before stabilizing near 1.2150.

USD/CHF rose toward 0.9200 and touched its highest level in six months on Wednesday. The Swiss National Bank (SNB) will publish its Quarterly Bulleting for the third quarter later in the day.

Gold price extended the weekly slide and declined below $1,900 for the first time in five weeks early Wednesday. The benchmark 10-year US Treasury bond yield hold steady at multi-year highs at around 4.5%, not allowing XAU/USD to stage a rebound.