Dollar ignores hot US data as AI sell-off sinks tech and oil runs 8.11%

Week in Review, Friday, 16 October 2026. Published 21:15 UTC.

Mixed: Indices averaged -1.14% over 24h and CHF (0.26) held firm, but the yen (-0.27) caught no haven bid, high-beta NZD (0.39) led the table and USD (-0.31) sat last.

In short

• Hot US data piled up: CPI 3.7% vs 3.6%, retail sales 0.8% vs 0.3% and core PPI 5% vs 4.4%. A December Fed hike is near-fully priced (89%), yet USD ends the week last in the strength table at -0.31.
• An AI-linked equity sell-off took USTEC -5.54% and JP225 -7.88% on the week. XTIUSD rallied 8.11% to 100.18 on a Middle East risk premium.
• Next week is heavy on inflation data: Canada CPI on Monday, UK jobs on Tuesday, then UK and New Zealand CPI on Wednesday.

Themes

Hot US data, soft dollar

CPI, retail sales, PPI and Friday's industrial production (0.7% vs 0.4%) all beat. December Fed hike pricing sits at 89%, but the dollar slid with Treasury yields mid-week and Fed Chair Warsh gave no fresh guidance. The desk read is that hawkishness is largely priced, so further beats have diminishing upside for USD.

AI jitters drag on tech and Japan

Worries that higher US rates raise AI capex borrowing costs hit tech: USTEC -5.54%, NVDA -5.96% and TSLA -6.64% on the week, with JP225 -7.88%. The sell-off pulled yields lower and lifted CHF, leaving USDCHF -0.73% after rejecting 0.8395. UK100 bucked the trend at +3%.

Oil's risk premium keeps building

XTIUSD rose 8.11% on the week to 100.18, driven by Middle East and Hormuz risk and a large EIA draw. The desk notes that Gulf exports are near pre-war levels, so the premium depends on headlines and is exposed to any credible de-escalation. Friday's late spike came with no clear news driver.

Antipodeans split ahead of NZ CPI

Australia's -39.3K jobs print pushed November RBA hike odds down to roughly 15-20%, and AUD net shorts deepened. NZD finished as the strongest major (0.39) on lower US yields, with an RBNZ hike about 80% priced. That leaves Wednesday's NZ CPI as the test.

What moved

• XTI/USD +8.11% A Middle East risk premium and a -8.56M barrel EIA crude draw outweighed the IEA's release of strategic stocks; Friday's late 2.62% jump in 60 minutes had no single clear driver in our news feed.
• JP225 −7.88% Our news feed has no Japan-specific driver; the slide ran alongside the AI-linked equity sell-off that hit US tech.
• USTEC −5.54% An AI-linked sell-off, on worries that higher US rates raise borrowing costs for AI capex, hit tech, with NVDA -5.96% and TSLA -6.64% on the week.
• XAG/USD −6.28% Hot CPI, PPI and retail sales drove a hawkish Fed repricing, silver lost $60, and rebounds on lower yields were faded.
• GBP/USD +0.71% A weekly outside reversal off the 1.3137 10-month low, driven by strong UK data, BoE November hike bets and a soft dollar.
• AUD/NZD −1.12% Australia's shock jobs miss priced out a November RBA hike, while an RBNZ hike stays about 80% priced and NZD rose on lower US yields.

Releases

• USD Consumer Price Index (YoY) 3.7%. October Fed hike odds rose to around 42% and gold made its $4,078 post-CPI low, before those odds faded to 16% by Friday.
• USD Consumer Price Index ex Food & Energy (YoY) 2.6%. The core beat fed the hawkish repricing that broke silver below $60, leaving XAGUSD -6.28% on the week.
• USD Retail Sales (MoM) 0.8%. The beat did not stop Thursday's pullback in the dollar and Treasury yields, and USDCHF fell nearly 1% that day.
• USD Producer Price Index ex Food & Energy (YoY) 5%. Hot PPI briefly capped GBPUSD near 1.3270 but failed to revive October Fed hike bets.
• AUD Employment Change s.a. -39.3K. The shock miss cut November RBA hike odds to roughly 15-20% and sent AUDUSD below 0.6900, its lowest since early July.
• AUD Unemployment Rate s.a. 4.7%. It reinforced the jobs miss, and speculators deepened AUD net shorts to -117.3K; AUDUSD ends the week -0.57%.
• EUR Harmonized Index of Consumer Prices (YoY) 3.3%. The in-line print left the dollar as EURUSD's driver; the pair bounced off the 1.1113 16-month low to finish the week +0.34%.

Levels to watch

• USD/CHF 0.8227 Neckline of the 0.8382/0.8395 double top. Friday's low of 0.82178 dipped through it, and price closed back above at 0.82406.
• AUD/USD 0.6894 D1 support at the multi-month low, which the desk also flags as the H&S neckline. The 0.6903–0.7013 base broke intraday this week, with a weekly low of 0.68942.
• USD/CAD 1.4134 First H4 support after the break of the 1.4299 triple top, with lower highs and lower lows since; price closed at 1.4137.
• GBP/USD 1.3400 Next D1 resistance above the 1.3285 range top, which price cleared this week; the weekly high was 1.33715.
• XAU/USD 4,227.00 Top of the 4067–4227 H4 range, which has a run of lower highs at the top; this week's high of 4217.05 stayed beneath it.
• XAG/USD 55.385 D1 support at the weekly-low zone (week low 55.38), reached after the break below the 58.50–62.07 consolidation.

Ahead

• 02:00 UTC CNY Gross Domestic Product (YoY) Seen at 4.4% vs 4.3% prior, alongside retail sales and industrial production. It is an early-week growth read for AUDUSD and AUDNZD, with AUD already weighed down by its jobs miss.
• 12:30 UTC CAD BoC Consumer Price Index Core (YoY) Core is the swing factor for BoC hike odds before the Oct 28 decision (street ~1.8-1.9%, prior 2.4%); USDCAD sits at two-week lows going in.
• 06:00 UTC GBP ILO Unemployment Rate (3M) Unemployment is seen rising to 5% from 4.9%. A soft labour print is the main risk to the rich BoE hike path behind GBPUSD's reversal.
• 06:00 UTC GBP Consumer Price Index (YoY) Headline is seen at 3.4% from 3.1%, with core at 2.7%. A November BoE hike is near-consensus, so a miss exposes GBPUSD, EURGBP and GBPJPY.
• 16:30 UTC EUR ECB's President Lagarde speech Markets already price about 75bp more ECB tightening and EUR shorts are crowded at -137.6K. Her tone matters for EURUSD's fragile rebound.
• 21:45 UTC NZD Consumer Price Index (QoQ) Seen at 0.8% vs 1.5% prior, with an RBNZ hike about 80% priced. A soft print carries the bigger risk for NZDUSD and AUDNZD.

Weekend Middle East headlines and the IMF meetings are the first test for oil's premium and the soft dollar, ahead of Monday's China data and Canada core CPI.