Forex Forecast: Sticky US CPI Reshapes USD Rate Path
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October's forex forecast hinges on a stubborn 3.7% US CPI print that has pushed FedWatch rate-cut probabilities lower than markets priced just weeks ago. This repricing is already rippling through EUR/USD and GBP/USD, as traders weigh whether the Fed can justify further easing into year-end.
Gold's inverse correlation to the dollar makes XAU/USD a useful proxy here: with bullion holding a bullish structure, it implies underlying dollar softness that forex forecast models must now factor into medium-term USD pair positioning.
Expect volatility around upcoming Fed commentary, as any hawkish surprise could sharply reverse the dollar-weakness narrative currently baked into most forex forecast scenarios for Q4 2026.