Forex Today: No surprises expected from the Fed

The US Dollar has experienced an uptick, reaching fresh two-week highs on Monday, fueled by mixed US Treasury yields and the Fed's cautious approach. The US Dollar Index (DXY) has further extended its recent break above the 102.00 level, hitting new two-week peaks. The Federal Open Market Committee (FOMC) meeting and Chair Jerome Powell's press conference will be the focal points, alongside the release of MBA Mortgage Applications, advanced Goods Trade Balance, Wholesale Inventories, and the EIA's weekly report on US crude oil stockpiles.

EUR/USD has faced increased selling pressure, slipping towards two-week lows near 1.1130. The German GfK Consumer Confidence index will be published domestically. GBP/USD has declined for three consecutive days, nearing key 1.3300 and five-day lows. The Autumn Budget will be the primary focus on the UK schedule. USD/JPY has risen to the boundaries of the 15800 barrier, hitting three-day highs.

In Japan, the weekly Foreign Bond Investment figures and Consumer Confidence reading will be released on October 29. AUD/USD has outperformed risk-related peers, reaching new five-week highs above the 0.7000 mark. The main Australian focus will be the release of September inflation figures. WTI futures (December contract) have faced additional selling pressure, nearing the $99.00 per barrel mark and adding to Monday's retracement.

Gold has shown notable strength, extending Monday's uptick and surpassing the $4,000 per troy ounce threshold. Declining crude oil prices and mixed US Treasury yields have provided some backing to the precious metal. Born and raised in Argentina, the reporter has been involved in FX markets and trading since college. AUD/USD has regained stability on Tuesday, surpassing the previous day's dip and continuing its move beyond the 0.7000 mark.

The pair's rebound has occurred despite another robust day for the Greenback before the FOMC meeting. Moving ahead, inflation figures will be the primary focus in Australia on Wednesday. USD/JPY has attracted buyers for three consecutive days, recovering from a one-month low ahead of the FOMC decision and the Bank of Japan's policy update on Friday.

The anticipation of the BoJ's potential restraint on aggressive rate hikes has put downward pressure on the Japanese Yen, enabling the US Dollar to advance towards a near two-week high and boost the currency pair. Gold has climbed higher during American trading hours on Tuesday, after trading in negative territory earlier in the day, following a slight decline in Oil prices that offers some relief.

However, a stronger USD limits the upside as traders await the Fed's monetary policy announcement on Wednesday. The US Dollar Index has risen by 0.6% over three days and has reached fresh two-week highs above 102.00. Investors are returning to the US Dollar as markets prepare for a hawkish stance from the Fed on Wednesday. The fading hopes of an immediate US-Iran peace deal have provided further support to the safe-haven USD.