Dollar falls across majors as Fed's Williams cools hike bets before CPI

The dollar fell against every major currency on Tuesday after New York Fed President John Williams signalled no rate hike in 2027, cooling some of the tightening talk that pushed the greenback to an 18-month high. The yen gained the least, as FXStreet reports the Bank of Japan was said to be leaning against an October rate hike.

The headlines in this edition were published before Wednesday's US consumer price report. The pack does not contain the CPI result.

What moved and why

Williams set the tone late in the US session. FXStreet says the pound gained as Williams saw no 2027 hike. The Aussie also climbed, with FXStreet reporting a gain of over 0.34% and AUD/USD trading at 0.6983 as US data came in mixed.

Not every Fed voice agreed. According to the investingLive Americas wrap, Boston Fed President Susan Collins reiterated her support for another rate hike before year end. The same wrap says oil rose and stocks slipped.

The Mexican peso went the other way. FXStreet reports USD/MXN at 18.36, up 0.57%, as Fed inflation fears outweighed Williams.

Geopolitical risk rose overnight. FXStreet reports that Yemen's Houthis fired missiles at cities across Saudi Arabia and an Aramco facility caught fire. Falling shrapnel injured at least four people in Riyadh. Gold slipped to near $4,155 in early Asian trade, according to FXStreet, as rising oil prices fed inflation concerns and tightening expectations.

The majors

The table shows ECB reference rates from the 2026-10-13 fixing, against the 2026-10-12 fixing. Fixings are a single daily snapshot, not live quotes.

The fixing caught the yen firmer at mid-afternoon in Europe, before the BoJ report left it trailing by the close. GBP/USD remains in its third week inside a roughly 1.3200 to 1.3300 range held since September 24, FXStreet notes. Our sister site used the same sterling move to explain how base and quote currencies work. Over five fixings, USD/MXN is up 2.17%, the largest move in the set. Chart: USD/JPY.

Central banks and data in the news

• Bank of Japan: reported to lean against an October hike, per FXStreet.
• Federal Reserve: Williams dovish, Collins backing one more hike. The Fed also published discount rate minutes for August and September meetings.
• China yuan: UOB strategists, quoted by FXStreet, see USD/CNH range-bound between 6.6900 and 6.7000 and expect it to keep edging lower over one to three months while below 6.7815.

What to watch next

1. US CPI for September, due at 8:30 AM ET on Wednesday, per investingLive. A survey of 14 bank forecasters cited by investingLive sees energy lifting headline to 3.6%, with core near 0.2%. The outlet says a core print around 0.24% or higher would firm December hike pricing, while 0.16% to 0.18% would support Williams.
2. US PPI on Thursday, which investingLive says completes the inflation picture.
3. China September CPI and PPI at 0130 GMT Wednesday, per the investingLive calendar. August CPI rose 0.8% y/y.
4. Middle East: any follow-up to the Houthi strikes on Saudi Arabia and the oil response. Chart: DXY.