Market Drivers – US Session, October 25

The US Dollar Index rose for the second consecutive day, rising above 106.50, the highest level since last Friday. The dollar received a boost from higher Treasury yields and deteriorating market sentiment following the latest round of earnings results. The Dow Jones dropped 0.32%, and the Nasdaq lost 2.43%. The 10-year Treasury yield rose to 4.94%.

Israel agreed to delay the invasion of Gaza. Prime Minister Benjamin Netanyahu stated that they are preparing for a ground invasion. Following these comments, crude oil prices rebounded, and WTI rose above $85.00.

Economic Data

Data from the US showed a surprising increase in New Home Sales in September, reaching 759,000 (annual rate), surpassing the market consensus of 680,000.

Key data is due from the US on Thursday. The first Q3 Gross Domestic Product estimate is expected to show a 4.2% expansion. Additionally, reports such as the Core Personal Consumption Expenditure Price Index, Initial Jobless Claims, and Durable Goods Orders will be released. These numbers are likely to have an impact on the market, the US Dollar, and expectations regarding Federal Reserve (Fed) monetary policy.

Market Developments

Moves in the bond market could also influence XAU/USD. If US data continues to indicate a robust economy, the US Dollar could benefit.

EUR/USD rose above 1.0600 but subsequently declined towards 1.0560. The pair continues to face downward pressure, although it remains above a short-term uptrend line.

The European Central Bank (ECB) is expected to keep interest rates unchanged on Thursday. The focus will be on ECB President Christine Lagarde’s forward guidance. With the Eurozone heading towards a recession and inflation indicators slowing down, it is unlikely that there will be any rate hikes in the near future.

GBP/USD recorded its lowest daily close since October 3, just above 1.2100. The British Pound also weakened against the Euro on expectations that the Bank of England (BoE) will maintain unchanged interest rates.

USD/JPY broke above 150.00 and is surging, potentially attracting the attention of Japanese officials. This development may lead to increased volatility in Yen’s crosses over the following hours.

USD/CAD jumped to its highest level since March, moving towards 1.3800, following the Bank of Canada (BoC) meeting. The BoC kept its key rate unchanged at 5% but maintained a tightening bias. The Bank’s inflation forecast indicates that it expects inflation to reach the 2% target by the end of 2025, slightly later than its previous projection of mid-2025.


The Australian Dollar rose during the Asian session following higher-than-expected Australian inflation data but later retraced its gains. AUD/NZD reached a five-week high at 1.0915 before turning lower and falling to 1.0860. AUD/USD reached weekly highs at 0.6400 and then reversed sharply, falling toward 0.6300. On Thursday, Reserve Bank of Australia (RBA) Governor Michele Bullock will appear before the Senate Economics Legislation Committee. Later in the day, the Export and Import Price Index is scheduled to be released.

The Central Bank of the Republic of Turkey (CBRT) is scheduled to meet on Thursday, and the consensus points to another 500 basis points rate hike, bringing the interest rate to 35%. USD/TRY has reached a new record high, closing above 28.00.

Gold regained momentum despite higher yields and tested levels above $1,980. Meanwhile, Silver failed to reclaim the $23.00 level.

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