What you need to know on Thursday, September 30:
The US dollar continued to strengthen on growth concerns and speculation that the US Federal Reserve will soon begin to cut back its massive stimulus programs. The Chairman of the United States Federal Reserve, Jerome Powell, repeated his statement before Congress. As he did yesterday, Powell noted that the central bank is fairly close to achieving its employment goals, which will allow policymakers to begin to regain financial support. He reiterated that the inflation peaks are mainly due to supply restrictions that satisfy a very strong demand and which he expects to be temporary. If inflation stays too high for too long, the Fed would respond.
The EUR / USD pair fell below 1.1600, to trade at its lowest level for the year. GBP / USD also fell to a new 2021 low of 1.3411, holding close as the day came to a close, with the pound hit by the fuel crisis.
Yields on US Treasuries hit new highs several months before the open, following the poor performance of Asian stocks. The yield on the 10-year bond reached 1.56% to finally stabilize at around 1.54%. The USD / JPY pair is currently trading around 112.00.
Meanwhile, news reported that Evergrande, the troubled Chinese real estate giant, missed a $ 45.2 million coupon payment after it reportedly failed to make another payment last week. The company has a 30-day grace period for each payment, so it could become a problem if the situation continues for the next few weeks.
Commodity currencies were also under strong selling pressure. AUD / USD is near its daily low around 0.7170, while USDCAD remains in the 1.2750 price zone.
Gold fell to $ 1,721.59 a troy ounce, while crude prices held firm. WTI is up a few cents and is currently trading at $ 74.80 a barrel.
Asian indices closed lower, although European and US indices posted modest intraday gains. China will release its official PMI figures early Thursday, which may set the tone for major pairs.
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