This is what you need to know to trade today tuesday october 4:
Risk appetite continues to dominate financial markets early Tuesday and the dollar has a hard time finding demand, while the DXY dollar index trades at its lowest level in more than a week and approaches 111.00. Eurostat will publish the data of the producer price index (PPI) of August. Later in the economic agenda of the United States will be published August factory orders and JOLTS job openings. Cleveland Fed President Loretta Mester and New York Fed President John Williams are scheduled to deliver speeches during the American session.
Wall Street’s main indices opened sharply higher and posted impressive gains on Monday, after the survey of the ISM Manufacturing PMI will show that price pressure continued to ease in the manufacturing sector and employment contracted modestly.. According to the CME Group’s FedWatch tool, the probability of a further 75 basis point (bp) Fed rate hike in November dropped to 50% following this report. The 10-year US Treasury bond yield falls more than 2% on the day after being down 5% on Monday.
Meanwhile, news reports suggesting that OPEC + could reduce oil production by more than a million barrels per day fueled crude oil prices with a barrel of West Texas Intermediate (WTI) gaining 5% on Monday before settling above $83.
During the Asian session on Tuesday, the Reserve Bank of Australia (RBA) has announced that it is raising its interest rate by 25 basis points, up 2.6% from 2.35%, versus market expectations for a 50 basis point rate hike. In its monetary policy statement, the RBA has reiterated that the size and timing of future rate hikes will be determined by the data and outlook for inflation and the labor market. Although the initial reaction saw the AUD weaken against its rivals, the AUD/USD regained its traction as political action by the RBA allowed market sentiment to remain upbeat. At the time of writing, the pair is up 0.3% on the day to hit 0.6535.
RBA: The size and timing of future rate hikes will be determined by the data and outlook for inflation and the labor market
The EUR/USD took advantage of the general weakness of the dollar and rose to its highest level since September 22near 0.9900, early Tuesday.
The GBP/USD it extends its rally on Tuesday and is now trading above 1.1400, up almost 1% on the day. On Monday, the pair gained 200 pips following the decision of the British government to reverse its plan to eliminate the 45% rate of income tax for the highest incomes.
The Prayed posted impressive gains on Monday and continues to climb now after breaking above $1,700. XAU/USD gains 0.6% on the day, trading at $1,710.
The USD/JPY lost its bullish momentum after breaking above the 145.00 level on Monday and ended up closing the day in negative territory. At time of writing, USD/JPY was virtually unchanged on the day at 144.55.
The Bitcoin benefited from improving risk sentiment and rose 3% on Monday. BTC/USD holds up early on Tuesday and continues to climb towards $20,000. The ethereum It is already up 5% since the start of the week, but is still trading below $1,400.
Source: Fx Street
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