Dollar Index Dives on Improved Risk Sentiment, Jobs Data Eyed


The dollar index which measures the greenback against a basket of currencies drifted lower for the second consecutive day as investors' risk appetite improved. DXY retreated from a sixteen-month high of 97.20 on Wednesday and traded at a low of 96.10 during today's Asian session. Market participants will be waiting for the jobs report where a strong earnings reading could lend support to the falling dollar. The USDCAD tumbled to a low of 1.3052, and the EURUSD rose to a one-week high of $1.1442.


The British pound advanced around 1.9% against the United States dollar to trade at a ten-day high of $1.3035. The sterling was the strongest performing currency across the board following the news that Britain is so close to sealing financial services deal with the European Union. On the other hand, the Bank of England kept the monetary policy unchanged with the interest rate at 0.75% and the asset purchases at 435B. The bank lowered the 2019 GDP forecast to 1.7% and expected the CPI to remain at 2.1% for the next two years. The bank's governor Mark Carney said that further monetary policy tightening measures would depend on how smooth the Brexit will be.


Major US indices finished higher for the third consecutive day as trade tensions receded. President Donald Trump tweeted that he had a good conversation with President XI which implied optimism that the U.S. - China trade tensions could ease in the near term. The strong performance continued during the Asian session where the U.S. equity futures rose to the highest level in more than a week on the news that Trump asked officials to draft a possible trade deal with China. The Dow Jones Industrial Average futures rose to a high of 25585, the S&P500 futures climbed to 2763, and the Nasdaq futures soared to 7143.


Metal prices appreciated due to the weakness in the US dollar. The gold ounce earned 1.4% to $1233, and the silver ounce gained 3.5% to $14.72.


Oil prices finished lower for the fourth consecutive day, weighed down by concerns of surging supply. The West Texas Intermediate crude futures lost 2% to a seven month low of $63.51, and the Brent futures dropped 2.5% to a ten-week low of $72.71. The Baker Hughes energy services firm will report the US oil rig count later today.

Major Economic Events

GMT Country Event Expectation Previous
9:00 EU Manufacturing PMI (Oct) 52.3 52.3
9:00 EU Manufacturing PMI (Oct) 52.1 52.1
9:30 UK Construction PMI (Oct) 52.00 52.1
12:30 US Average Hourly Earnings (MoM) (Oct) 0.2% 0.3%
12:30 US Nonfarm Payrolls (Oct) 193 134
12:30 US Unemployment Rate (Oct) 3.7% 3.7%
12:30 CA Employment Change (Oct) 12.7 63.3
12:30 CA Unemployment Rate (Oct) 5.9% 5.9%
17:00 US U.S. Baker Hughes Oil Rig Count   875


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