Hotter US core inflation lifts the dollar; gold slides 1.5%

US consumer prices rose 3.7% on the year in September against a 3.6% forecast, and core prices beat too. The dollar closed higher against six of the seven majors on our feed and level with the yen, EUR/USD fell back below 1.1159, and gold dropped 1.49% to $4,101.40, a 13th session close in a row below $4,200.

What the data showed

• USD · CPI y/y: 3.7% against a 3.6% forecast, from 3.4%; m/m 0.6%, as forecast. Action Forex said energy prices surged 5.2% on the month.

• USD · Core CPI m/m: 0.3% against a 0.2% forecast; y/y 2.6% against 2.5%. Our weekly wrap had quoted TD Securities expecting core at 0.20% and Wells Fargo expecting it to stay contained.

The dollar, yields and the Fed

• The dollar had extended Tuesday's losses in Asian trade after remarks from New York Fed President John Williams, FXStreet said. After the release it surged broadly, Action Forex said: the Dollar Index broke above 102.60 to 102.72 and the 10-year Treasury yield rebounded above 5.30%.

• Action Forex said the core beat pushed the odds of an October Federal Reserve hike above 40%, and Investing.com said the data put that hike back in play; our notes since weak September payrolls had read October as off the table. According to FXStreet, Chicago Fed President Austan Goolsbee said "CPI data was discouraging", Richmond Fed President Thomas Barkin said it ran too hot and kept the October decision open, and the Fed's Beige Book flagged intensifying price pressures. After the close, the same source reported that San Francisco Fed President Mary Daly saw further hikes as probably needed but none at the October meeting.

• Oil rose too: investingLive's Americas wrap had WTI up 98 cents at $95.12, after FXStreet reported Houthi missile attacks on Saudi Arabia and a fire at an Aramco facility.

The euro, the pound and the loonie

• EUR/USD peaked at 1.12114 at 06:45 UTC and broke below 1.1159 in the 12:00 UTC hour, the level that, according to Action Forex in our weekly wrap, would give the dollar another source of support on a renewed break. The pair fell to 1.11129 at 15:08 UTC and closed at 1.11569, down 0.37%, a sixth close in a row below 1.1215.

• After the close FXStreet said 1.1150 had stopped the euro's fall four times since 5 October before giving way, taking EUR/USD to its lowest since May 2025. The wrap tied 1.1159 to the French-German bond gap, and today's sources gave no figure for it.

• The pound reached a one-week high of 1.32753 at 04:58 UTC after the Financial Times reported that UK Finance Minister John Healey would fund the budget without extra borrowing, FXStreet said. It fell to 1.31369 at 15:12 UTC and closed at 1.31933, down 0.47%, the largest move of the seven against the dollar. That low, 63 pips under 1.3200, ended a run in which every session's low since 24 September had stayed within half a cent of it; after the close FXStreet called it the pound's lowest since late November 2025.

• USD/CAD touched 1.43000 at 14:02 UTC, the 1.43 Rabobank flagged in our weekly wrap, and got no further; it closed at 1.42381, up 0.16%. USD/CHF reached 0.83950 at 15:12 UTC, its highest since May 2025 according to FXStreet, and closed at 0.83496, up 0.28%.

Gold, the yen and the Aussie

• Gold peaked at $4,170.28 at 03:17 UTC on our feed, fell after the CPI release to $4,073.31 at 16:04 UTC and closed at $4,101.40, down 1.49%. FXStreet said the report revived bets on a Fed hike at the 27–28 October meeting.

• USD/JPY jumped to 158.949 at 13:22 UTC after the data, then gave it all back and closed at 158.319, level on the day: the only major the dollar did not gain against.

• AUD/USD crossed 0.70 in Asian trade and peaked at 0.70132 at 10:18 UTC; investingLive's Asia-Pacific wrap had cited Goldman Sachs saying the Reserve Bank of Australia's minutes lowered the bar for a November hike. It reversed after the CPI and closed at 0.69713, down 0.16%.

Market gauges and what's next

Our proprietary metrics at the close of the session:

• Readings: an MRS of 83, from 62 on Tuesday: its volatility (ATR) component rose to its full 30 from 11, with news at its full 20. A CTS of 54 with its carry backdrop at 60, and an FSI of 54, Neutral, from 55.

• Top of our strength table: no clear leader; the yen, on top for 227 of 1,440 minutes, and the US dollar, on 225, were within the noise margin.

• Bottom: the Australian dollar, last for 23% of the minutes.

• The Australian dollar: the table counts minutes in each place, not the session's net move. It spent the most minutes at the bottom on a day it lost less against the US dollar than the euro, the pound or the New Zealand dollar.

• Last week's test: gold got through the US inflation data without a session close above $4,200, its 13th close in a row below it on our feed. That test stays open for the rest of the week.

Today: UK GDP is due at 06:00 UTC, with a forecast of −0.1% on the month, and US producer prices and retail sales at 12:30 UTC, forecast at 0.6% and 0.3%.