Forex Today: Dollar stays quiet as focus shifts to US inflation report

Here is what you need to know on Thursday, October 13:

Following Wednesday's choppy market action, the greenback stays quiet early Thursday. Ahead of the US Bureau of Labor Statistics' highly-anticipated Consumer Price Index (CPI) data for September, the US Dollar Index fluctuates in a tight range above 113.00. The US stock index futures trade unchanged on the day and the 10-year US Treasury bond yield holds steady below 4%. Investors will also keep a close eye on the UK gilt markets as the Bank of England (BoE) nears the planned end of its emergency gilt purchase programme.

US CPI Preview: High expectations may trigger a dollar-buying opportunity, three scenarios.

The annual CPI in the US is expected to decline to 8.1% in September from 8.3% in August. The Core CPI, which excludes volatile food and energy prices, is forecast to rise to 6.5% from 6.3%. Meanwhile, the CME Group's FedWatch Tool shows that markets are pricing in an 81.3% probability of one more 75 basis points rate hike in November.

US September CPI Preview: Monthly core inflation is the figure to watch.

The BoE will conclude its emergency gilt-buying programme on Friday as planned. On Thursday, the bank accepted 1.96 billion and 2.37 billion pounds of offers in index-linked and long-dated gilt purchases, respectively. Bank of England Chief Economist Huw Pill said that significant policy response will still be required in November and the British pound preserved its strength. GBP/USD gained more than 150 pips on Wednesday and snapped a five-day losing streak. Meanwhile, Bloomberg reported that Chancellor of the Exchequer Kwasi Kwarteng would blame the BoE in case gilt yields surge next week. As of writing, GBP/USD was trading in negative territory at around 1.1070.

European Central Bank (ECB) President Christine Lagarde announced on Wednesday that the discussions on quantitative tightening have started but noted that the interest rate is still their primary policy tool. EUR/USD struggled to make a decisive move in either direction on Wednesday and continues to move sideways near 0.9700 early Thursday. The data from Germany showed that the annual CPI was 10% in September, matching the flash estimate and the market expectation.

USD/JPY surpassed the level that triggered the currency intervention in late September and climbed to a fresh multi-decade high at 147.00 before going into a consolidation phase below that level. Japanese Finance Minister Shunichi Suzuki, once again, said that they are ready to take action against speculative yen moves.

Crude oil prices fell for the third straight day on Wednesday and the barrel of West Texas Intermediate (WTI) touched its lowest level in a week at $86.25 amid renewed concerns over the oil demand outlook. WTI stays calm at around $87 in the early European morning.

Gold closed in positive territory amid sliding US yields on Wednesday but failed to carry its bullish momentum over to Thursday. At the time of press, XAU/USD was posting small daily losses slightly below $1,670.

Bitcoin extends its sideways grind into a third straight day and trades near $19,000. Ethereum failed to stage a convincing rebound on Wednesday and dropped below $1,300 early Thursday.