This is what you need to know to trade today Wednesday, October 20:
The dollar managed to erase a large part of its losses thanks to the recovery in US Treasury yields on Tuesday, but struggled to find demand against its risk-sensitive rivals. Market mood appears to have turned cautious on Wednesday as investors await inflation data from the euro zone and Canada. Later in the day, the Federal Reserve will publish its Beige Book.
Macro data: US data showed Tuesday that housing starts and building permits declined 1.6% and 7.7%, respectively, in September. Today Wednesday, the People’s Bank of China (PBoC) left its one-year prime rate unchanged at 3.85% as expected. The UK Office for National Statistics announced that the Consumer Price Index (CPI) fell to 3.1% annually in September from 3.2% in August. In addition, the underlying CPI fell to 2.9% in the same period, below the market expectation of 3%.
The 10-year US Treasury yield it rose during US business hours and ended up gaining more than 2% on Tuesday. Currently, the 10-year yield remains relatively quiet around 1.65%, helping the dollar to remain resilient against its rivals. Meanwhile, the DXY dollar index, which hit a three-week low at 93.50, is fluctuating around 93.70.
Wall Street: The S&P 500 Index closed the fifth consecutive trading day in positive territory and reached its highest level since early September at 4,520. The Dow Jones Industrial Average was up 0.55% and the Nasdaq Composite advanced 0.7%. US stock index futures are posting modest losses early in the European session. After the closing bell, Tesla will release third-quarter earnings figures.
AUD/USD and NZD / USD they were the biggest winners on Tuesday and continue to climb on Wednesday. A negative change in risk sentiment could cause these pairs to make a sharp correction.
The EUR/USD It rose to its highest level in a month at 1.1670, but dovish comments from European Central Bank officials made it difficult for it to maintain its bullish momentum. The pair appears to have entered a consolidation phase around 1.1650 on Wednesday.
The GBP/USD It did not show an immediate reaction to the September inflation figures and continues to move sideways around 1.3800 as investors assess the likelihood of a Bank of England rate hike before the end of the year.
The oro It rose above $ 1,780 on Tuesday, but changed direction in the second part of the day, as it remains one of the assets most sensitive to fluctuations in US Treasury yields. For the moment, XAU / USD is floating in the green above $ 1770.
cryptocurrencies: BTC gained more than 3% on Tuesday and remains close to the all-time highs near $ 64,000 on Wednesday. Ethereum bulls are still waiting for ETH to break above $ 4,000.