Forex Today: Market mood improves slightly to start the new week

Here is what you need to know on Monday, October 23:

Financial markets remain relatively calm to on Monday as investors stay on the sidelines ahead of this week’s key macroeconomic data releases. Later in the session, Germany’s Bundesbank will publish its monthly report and the European Commission will release the preliminary Consumer Confidence data for October. The Federal Reserve Bank of Chicago’s National Activity Index will be featured in the US docket in the American session.

The benchmark 10-year US Treasury bond yield stays below 5% after touching its highest level since November 2007 last week and US stock index futures trade modestly higher in the early European session. Following Jim Jordan’s third failed vote on Friday, 9 Republican lawmakers announced their candidacies for speaker. Republicans will reportedly meet on Monday to discuss the candidates and have an internal vote Tuesday morning. 

Meanwhile, Israel’s military said that it will ramp up aerial bombardment of Gaza and called for civilians to evacuate to northern parts of the region. The US government is reportedly trying to convince Israel to delay a ground operation to allow more time for hostage negotiations and to get more humanitarian aid into the area. 

EUR/USD closed the previous in positive territory but failed to stabilize above 1.0600. At the time of press, the pair was seen moving sideways in a tight channel slightly above 1.0550.

After falling below 1.2100 on Friday, GBP/USD staged a rebound ahead of the weekend. The pair seems to have stabilized above 1.2150 to start the new week. On Tuesday, the UK's Office for National Statistics will release the August jobs data.

Japan's Nikkei newspaper reported on Sunday that the Bank of Japan officials were considering to adjust the yield curve control strategy amid heightened uncertainty surrounding the global economic outlook with escalating geopolitical tensions in the Middle East. Japan's Nikkei 225 Index came under heavy bearish pressure and fell nearly 1% on Monday. In the meantime, USD/JPY continues to trade dangerously close to 150.00.

Gold continued to benefit from safe-haven demand and extended its weekly rally on Friday. XAU/USD came within a touching distance of $2,000 and set a new multi-month high ahead of the weekend. The pair staged a downward correction early Monday and was last seen trading in negative territory below $1,980.