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Forex Today – Asian Session: Dollar shows strength, RBA to keep rates unchanged

The key event of the Asian session will be the Reserve Bank of Australia meeting. Later, Switzerland will report on consumer inflation, and in the United States JOLTS data on job openings will be published.

Here’s what you need to know on Tuesday, October 3:

The US dollar opened the week strongly, resuming the recovery that began on Friday. The Dollar Index surpassed 107.00 points, recording its highest daily close since November. Rising US yields, cautious market sentiment and positive US data continue to support the dollar’s recovery.

The US 10-year debt yield hit 4.70% for the first time since 2007. US data beat expectations, with the ISM Manufacturing PMI at 49, beating the market consensus of 47.7. The JOLTS job openings report will be published on Tuesday. More US employment data will be released later this week with the ADP report and non-farm payrolls.

Wells Fargo analysts on US data:

Manufacturing activity contracted at the slowest pace in almost a year, according to the September ISM. The latest data points to some relief in the sector, while rising oil prices point to possible upside risks.

The EUR/USD pair broke below 1.0500, hitting new year-to-date lows. The pair remains under pressure after maintaining the downtrend. A possible support level is around 1.0460. The strength of the US dollar also weighed on GBP/USD, which broke below 1.2100, marking three-month lows.

USD/JPY continues to gradually approach the 150.00 level amid rising yields. A break above 150.00 could trigger volatility and speculation about intervention by Japanese authorities.

The AUD/USD pair extended its reversal from 0.6500 and fell to 0.6360. The Reserve Bank of Australia (RBA) will announce its monetary policy decision on Tuesday, with no changes expected. It will be the first meeting with Michele Bullock as governor.

The Kiwi fell against the US dollar; However, it outperformed the AUD and the CAD. The NZD/USD pair retreated to 0.5950 after failing to hold above 0.6000, but remained above the 20-day SMA. The Reserve Bank of New Zealand (RBNZ) will hold its monetary policy meeting on Wednesday.

USD/CAD It has returned to the September highs, slightly below the 1.3700 area, which is a key resistance level. A breakout to the upside would clear the way for further upside. Canada will report employment data on Friday.

Metals had another terrible day, with Gold falling more than $20 to $1,828, the lowest since March, and Silver collapsing more than 5% to $21.00. XAG/USD lost more than 10% from Friday’s high.

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Source: Fx Street

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