USD/JPY Dips on Tokyo CPI Climb, Dollar Index Finishes Flat
AUD Rallies; Bond Yields Ease; Wall Street Stocks Mixed
The Dollar Index (DXY), a popular gauge of the Greenback’s value against a basket of 6 major currencies, ended flat, at 106.58 (106.60). The US currency maintained its gains versus its rivals ahead of this week’s Federal Reserve interest rate decision.
Against the Japanese Yen, the Dollar dipped to 149.65 at the close of trade in New York from Friday’s opening at 150.37. The Yen gained on a rise in Tokyo’s Annual Core CPI to 2.7% from 2.5% previously.
The Euro (EUR/USD) eased modestly to 1.0560 from Friday’s opening at 1.0570. The shared currency failed anew to break the 1.0600 barrier, trading to an overnight high at 1.0597.
Sterling (GBP/USD) dipped to 1.2120 against Friday’s 1.2130. In choppy overnight trade, the British currency soared to 1.2163 highs before sliding back to its close. The overnight low was at 1.2102.
Against the trend, the Australian Dollar (AUD/USD) rallied versus the Greenback to finish at 0.6335 (0.6325). Australia’s Q3 Producer Prices rose more than expected to 1.8% against forecasts at 1.2%.
The Dollar was mixed against the Asian and Emerging Market Currencies. USD/CNH (Dollar-Offshore Chinese Yuan) edged higher to 7.3270 from 7.3230. The USD/THB pair dipped to 36.10 (36.25).
The 10-year US Treasury yield dipped to 4.83% from 4.84%. Germany’s 10-year Bund yield was last at 2.83% from 2.86% Friday. Australia’s 10-year bond rate closed at 4.81%, down from 4.87% previously.
Other economic data released Friday saw France’s October Consumer Confidence climb to 84 from 83. The US September Core PCE Price Index rose to 0.3% from 0.1%, matching estimates.
US September Personal Income dipped to 0.3% from 0.4% while US Personal Spending rose to 0.7% from 0.4% previously. The US Michigan Consumer Sentiment Index fell to 63.8 from 68.1 previously but beat expectations at 63.0.
- AUD/USD – Against the trend, the Aussie Battler grinded higher against the Greenback to finish at 0.6335, up from Friday’s opening at 0.6325. In volatile trade, the Australian Dollar jumped to an overnight high at 0.6368. The overnight low recorded was at 0.6319.
- USD/JPY – Dollar Yen trading was also choppy. The Greenback soared to an overnight high at 150.42 from its Friday opening at 150.37. The USD/JPY pair tumbled to a low at 149.46. The rise in Japan’s Tokyo inflation report to 2.7% from 2.5% supported the Japanese currency.
- GBP/USD – Sterling dipped to 1.2120 at the close of trade, little changed from its opening at 1.2130. In choppy trade, the British Pound saw an overnight high at 1.2163 while the overnight low recorded was at 1.2102. There was no major UK data released on Friday.
- EUR/USD – The shared currency dipped to 1.0560 at the close of trade, little changed from its opening at 1.0570. Overnight, the Euro rallied to 1.0597, just short of the 1.0600 resistance level. The overnight low recorded was 1.0537.
On the Lookout:
Today’s economic calendar is light. Australia kicks off with its September Retail Sales report (m/m f/c 0.3% from 0.2% - ACY Finlogix).
Germany follows with its Flash GDP Growth Rate (q/q f/c -0.3% from 0%; y/y f/c -0.7% from -0.2% - ACY Finlogix).
The UK releases its September Mortgage Approvals (f/c 45k from 45.354k – ACY Finlogix), and UK September Net Lending to Individuals (m/m f/c 0.5 billion from 2.9 billion – ACY Finlogix).
The Eurozone releases its October Economic Sentiment (f/c 93 from 93.3 – ACY Finlogix) and October Consumer Confidence (f/c -17.9 from -17.9 – FX Street).
Finally, the US releases its September Dallas Fed Manufacturing Index (no f/c, previous was -18.1 – FX Street).
The week ahead promises more volatility in FX culminating in the US Payrolls report on Friday.
While the Dollar Index (DXY) dipped a tad, the US currency maintained its bid. The highlight for this week is the Federal Reserve’s rate decision following their meeting (Thursday, 2 November).
The FOMC is widely expected to keep its Federal Funds Rate unchanged at 5.5%. Markets will be scrutinizing the FOMC Statement as well as Federal Reserve President Jerome Powell’s words in his speech following the release.
Friday (3 November) sees the release of the October US Jobs report. The US Non-Farm Payrolls gain will be the focus, which at this time of writing is forecast to slide to 182,000 from 336,000.
Because of the relatively large difference, traders will be watching for revisions on this number heading into Friday.
- AUD/USD – While the Australian Dollar managed to grind higher against the Greenback, expect any topside advances to be limited today. Immediate resistance lies at 0.6360 followed by 0.6390 and 0.6420. On the downside, look for immediate support at 0.6310 followed by 0.6280 and 0.6250. Look for the Aussie to consolidate in a likely range today of 0.6300-0.6350. Prefer to sell rallies.
- USD/JPY – After climbing above the 150 Yen level on Friday, the US Dollar retreated to finish at 149.65. On the day, look for immediate support at 149.45 (which is the overnight low traded). The next support level comes in at 149.15. Immediate resistance can be found at 149.95 followed by 150.25. Look for the Dollar-Yen to trade in a likely range today of 149.45-150.45. Trade the range.
- GBP/USD – Sterling slid against the broadly based stronger US Dollar to 1.2020 against Friday’s open at 1.2130. On the day, look for immediate support at 1.2000 (overnight low traded was 1.2004). The next support level lies at 1.1970. Immediate resistance for the British currency lies at 1.2150 followed by 1.2180 and 1.2210. Look for Sterling to trade a likely range of 1.2070-1.2170. Trade the range, the preference is to sell rallies.
- EUR/USD – The shared currency eased to close at 1.0560 from 1.0570 on Friday. Look for immediate support at 1.0535 (which was the overnight low traded). The next support level is found at 1.0505. On the topside, immediate resistance can be found at 1.0600 followed by 1.0630. Look for the Euro to consolidate in a likely range today of 1.0530-1.0630. The preference is to sell Euro rallies.
Have a top trading week ahead all, happy Monday.
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