Forex Today: US Dollar on the back foot ahead of PPI data, Fedspeak

Here is what you need to know on Wednesday, October 11:

The US Dollar (USD) continued to weaken against its rivals on Tuesday, with the US Dollar Index closing the fifth straight day in negative territory. Producer Price Index (PPI) data for September will be featured in the US economic docket and several Federal Reserve (Fed) officials will be delivering speeches. Market participants will continue to pay close attention headlines surrounding the Israel-Hamas conflict. Finally, the Fed will release the minutes of the September policy meeting.

FOMC Minutes Preview: Reinforcing higher for longer.

Dovish comments from Fed policymakers and the improvement seen in risk mood made it difficult for the USD to find demand on Tuesday. Wall Street main indexes closed in postive territory and the benhcmkar 10-year US Treasury bond yield closed the late little changed at 4.65%. In the European morning, 10-year yield holds steady near Tuesday's closing level and US stock index futures trade flat. 

Israeli airstrikes continued for the fifth straight day following Hamas' suprise attack. In a press conference late Tuesday, US President Joe Biden called the Hamas attacks "an act of sheer evil" and announced that they were rushing additional military assistance to Israel. In the meantime, US Defense Secretary Lloyd Austin said that they have sent a carrier strike group to the eastern Mediterranean Sea.

EUR/USD touched its highest level in two weeks above 1.0600 on Tuesday before going into a consolidation phase near that level early Wednesday. The data from Germany confirmed that the annaul Consumer Price Index (CPI) rsoe 4.5% in September. 

GBP/USD climbed above 1.2300 for the first time since September 21 during the Asian trading hours on Wedensday but retreated below that level by the European morning.

Despite the broad USD weakness, USD/JPY fluctuated in a tight channel on Tuesday and closed the day virtually unchanged. Early Wednesday, the pair continues to move sideways slightly below 149.00.

Following Monday's upsurge, Gold price staged a technical correction and declined toward $1,850 on Tuesday. With the US yields holding steady, however, XAU/USD managed to find support. At the time of press, the pair was trading modeslty higher on the day slightly above $1,860.