[MARKET ANALYSIS] DXY continued to reverse the post-CPI upside, while Fed officials voice a lack of urgency for an immediate rate hike

DXY: -0.5% Ultimately weakened after wiping out the initial gains from the hotter-than-expected CPI report, with the reversal coinciding with a drop in yields as bonds rallied amid a flight to safety, while there was also recent Fed commentary with Bowman stating there is no urgency to take further action on interest rates, while Goolsbee said a hotter-than-expected reading on September inflation is “discouraging" but wants to wait for more data before taking action to raise rates higher. EUR/USD: +0.6% Clawed back recent losses as the dollar dwindled, while participants got to digest rhetoric from ECB officials, with Simkus stating that he doesn't see a role for ECB intervention in France at present and doesn't see evident second-round effects yet. Furthermore, Pereira said the good news is that inflation is not spreading and if inflation starts broadening, central banks will be forced to act. GBP/USD: +0.5% Benefited from the broad dollar weakness and reclaimed the 1.3200 handle, with a report noting that UK Chancellor Healey said he will follow IMF advice to stick to deficit reduction plans in the October 28th Budget, while participants now look ahead to monthly GDP and production data. USD/JPY: -0.4% Fell beneath the 158.00 handle owing to the softer buck and following stronger-than-expected Japanese Machinery Orders, while there were comments from BoJ board member Koeda that the central bank should not become overly cautious about raising the policy interest rate, and Japanese Finance Minister Katayama said there was no change in the US-Japan message since intervention. Antipodeans: AUD/USD -0.2% / NZD/USD +0.6% Mixed price action with AUD/USD underperforming following the latest jobs data, which showed an unexpected contraction in headline Employment Change, but which was solely due to part-time work, while the Unemployment Rate rose, although it coincided with a fall in the Participation Rate.