Currency Markets Respond to Inflation Data and Geopolitical Tensions

The U.S. dollar remained almost unchanged amid new inflation data indicating consumer prices rose less than anticipated in September. The Federal Reserve is likely to cut rates next week. Geopolitical tensions, trade talks, and sanctions affected global currencies, including impacts on euro, yen, and Canadian dollar.

The U.S. dollar showed little movement on Friday following the release of inflation figures revealing that consumer prices in the U.S. increased at a slower pace than expected for September. With the Consumer Price Index rising 0.3% month-on-month and by 3.0% year-on-year, the existing anticipation that the Federal Reserve would cut interest rates again strengthened.

Subsequent to the report, the dollar index decreased marginally, prompting reactions from market analysts who were expecting such results. Meanwhile, the Consumer Price Index report, which had been delayed due to a government shutdown, despite being initially scheduled for October 15, informed the Social Security Administration's benefits adjustments.

Geopolitical factors also cloud currency markets as discussions about a potential meeting between President Donald Trump and Chinese President Xi Jinping fueled hopes of a trade resolution. Similarly, new U.S. sanctions targeting Russian energy firms impacted oil prices, influencing currencies linked to oil imports like the yen. Economic moves in Japan and the U.K. also played a role in currency fluctuations globally.

(With inputs from agencies.)