US Dollar Pressured Amid Uncertainty
Anxiety regarding possible government shutdowns in the US has placed the dollar under pressure on Tuesday, continuing a trend of recent weakness in the currency. This instability is being compounded by expectations of the Federal Reserve potentially lowering interest rates.
Highlights for Wednesday, October 1st:
The US Dollar Index (DXY) dipped to a four-day low in the 97.70-97.60 range, influenced by a decline in US yields across the board. The usual weekly MBA mortgage applications will be released ahead of the EIA’s weekly report on ADP employment changes, ISM manufacturing PMI, the final S&P global manufacturing PMI, construction spending, and US crude oil reserves. Additionally, Fed representative Logan is scheduled to speak.
EUR/USD has regained ground for three consecutive days, moving back to around 1.1760. The preliminary inflation rate in the Eurozone will come under scrutiny, along with the final HCOB manufacturing PMI for Germany and the broader Euro area. ECB officials De Guindos and Elderson will also be addressing the market.
GBP/USD approached 1.3460, reaching a multi-day high as the persistent bearish sentiment surrounding the dollar persisted. The final S&P Global Manufacturing PMI is expected to provide support for nationwide home prices.
The downward trend has pushed USD/JPY back to the 147.70 area for the third consecutive day on Tuesday, coinciding with the release of the Tankan survey and the final S&P Global Manufacturing PMI.
AUD/USD has reached an eight-day high, breaching the 0.6600 level, which may lead to challenges against year-to-date highs, slightly above 0.6700. Upcoming reports include the AI Group Industry Index and the final S&P Global Manufacturing PMI alongside product prices.
WTI oil prices decreased further on Tuesday, as traders assessed the likelihood of a larger output hike from OPEC+, following a six-day low, nearing the $62.00 per barrel mark.
In contrast, gold prices surged, hitting a record high of $3,870 per troy ounce, driven by fears over potential Fed rate cuts and the threat of US government closures. Meanwhile, silver prices dipped, ending a three-day streak despite surpassing the $47.00 per ounce mark, which is the highest level seen since early May 2011.
