What to watch for on Tuesday, October 4:
The Dollar resumed its decline at the start of the week, ending Monday with losses across the currency board. The EUR/USD pair made a modest advance and settled around 0.9820, with the shared currency being one of the worst performers against the dollar. The downward revision of the S&P global manufacturing PMIs weighed on the euro.
Financial markets traded optimistically, despite persistent recession concerns. The political and financial turmoil in the Kingdom Kingdom continues to cause volatile reactions in the markets and leads the trend. The UK government proposed a possible 45% tax cut on income, but UK Finance Minister Kwasi Kwarteng later said he scrapped the idea. The announcement underpinned GBP/USD, which ended the day near an intraday high of 1.1333. Following the UK news, European indices reversed early losses and settled into the green.
The Dollar tried to advance before the opening of the United States, but the tepid local data returned it to the bearish path. The ISM Manufacturing PMI contracted to 50.9 in September, remaining just barely in expansion territory.
Wall Street picked up where European indices left off and posted a substantial advance, further undermining demand for the dollar. US Treasury yields fell, with the yield on the 10-year Treasury note down about 15 basis points.
The AUD/USD pair recovered the threshold of 0.6500 before the Reserve Bank of Australia decision of politics monetary. USD/CAD sits near its intraday low around 1.3630.
Lastly, the greenback made mixed gains against its safe-haven rivals, with USD/CHF trading at 0.9930 and USD/JPY at 144.75.
The gold is Shooting and flirts with $1,700 a troy ounce, while crude oil prices also advanced. WTI is currently trading around $83.50 a barrel.
Government bond yields fell sharply but moved off their intraday lows before the close.
Source: Fx Street
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