Key Takeaways
- The US Dollar Index (DXY) dropped below the 99.00 support level, influenced by falling US Treasury yields.
- EUR/USD recovered above 1.1600, while GBP/USD found support after an initial decline.
- USD/JPY saw a modest loss, reversing recent gains, ahead of foreign bond investment data.
- AUD/USD continued its downtrend, with manufacturing and services PMIs anticipated.
- WTI crude oil rebounded, nearing $59 per barrel, on improved US-China trade sentiment.
Market Overview and US Dollar Performance
The US Dollar (USD) faced renewed selling pressure, halting a multi-day advance and falling from fresh weekly highs. This occurred despite some easing of concerns regarding US-China trade relations. Concurrently, the ongoing US federal government shutdown continued to be a background factor influencing market sentiment.
Economic Data and Currency Movements
The US Dollar Index (DXY) broke its three-day winning streak, trading below the 99.00 support level. This decline was largely attributed to weaker performance in US Treasury yields. Market participants were watching for the release of the Chicago Fed National Activity Index and Existing Home Sales data.
💡 EUR/USD Analysis: The EUR/USD pair regained upward momentum, moving back above the 1.1600 level and recovering from recent weakness. Investors looked ahead to the European Commission’s advanced Consumer Confidence gauge and a speech by ECB official Lane.
GBP/USD Outlook: The GBP/USD pair experienced a dip for the fourth consecutive day, testing the 1.3300 support before staging a notable comeback. Key economic releases included the CBI Business Optimism Index and CBI Industrial Trends Orders, followed by remarks from BoE’s Hall.
📊 USD/JPY Trends: USD/JPY ended the trading day with minor losses, settling around the 151.80 region and reversing three consecutive days of gains. Attention was on the forthcoming weekly Foreign Bond Investment figures.
⚡ AUD/USD Performance: AUD/USD extended its decline from Tuesday, experiencing a marginal retreat and revisiting the 0.6480 zone. The economic calendar included flash S&P Global Manufacturing and Services PMIs, along with a speech by RBA’s Bullock scheduled for October 24.
Commodity Market Updates
WTI Crude Oil Rebounds: West Texas Intermediate (WTI) crude oil experienced a sharp rebound, reaching four-day highs near the $59.00 per barrel level. This upward movement was supported by renewed optimism surrounding US-China trade discussions, which boosted trader sentiment.
Gold and Silver Dynamics: Gold prices briefly dipped to two-week lows, approaching the critical $4,000 mark per troy ounce. This pressure was influenced by cooling trade tensions and a firming US Dollar. Subsequently, further weakness saw Silver prices fall below $48.00 per ounce, though the metal later found some stability.
Expert Summary
The US Dollar faced renewed selling pressure, dipping below key support levels amid a decline in Treasury yields. Major currency pairs like EUR/USD and GBP/USD showed resilience or recovered from initial losses. Commodity markets saw WTI crude oil rebound strongly, while gold experienced temporary weakness before stabilizing.