The US Dollar faced a decline at the beginning of the week, signaling the unwinding of the “Trump trade” amid caution ahead of the US election and the FOMC meeting. The US Dollar Index (DXY) broke below the 104.00 support level, reaching new two-week lows, as investors exercised prudence. The upcoming US economic indicators to watch are the ISM Services PMI, the final S&P Global Services PMI, and the API’s weekly report on US crude oil inventories.
EUR/USD saw an upward movement beyond the 1.0900 barrier, with the initial momentum slowing down towards the end of the NA session on Monday. Investors are attentive to speeches by ECB officials Lagarde and Schnabel. GBP/USD experienced an increase following a weaker US Dollar, but struggled to surpass the key 1.3000 level. The upcoming economic data includes the BRC Retail Sales Monitor, New Car Sales, and the final S&P Global Services PMI.
USD/JPY faced notable losses, nearing a test of the 200-day SMA in the mid-151.00s. Key events on the Japanese calendar to look out for include the release of the BoJ Minutes and the final Jibun Bank Services PMI. AUD/USD climbed to multi-day highs, surpassing the 0.6600 level and approaching the 200-day SMA. The focus in Australia will be the RBA’s interest rate decision.
WTI prices rose above $71.00 per barrel, reaching two-week highs after OPEC+ decided to postpone planned oil output increases in December. Meanwhile, Gold prices experienced a modest increase, hovering near $2,750 per ounce, benefiting from the weaker US Dollar and stability in US yields. Silver prices rebounded after three consecutive pullbacks, nearing the important $33.00 mark per ounce.
In conclusion, the US Dollar faced pressure due to the unwinding of the “Trump trade” at the start of the week. As investors exercise caution ahead of the US election and the FOMC meeting, various currency pairs like EUR/USD and GBP/USD saw movements in response to the weaker US Dollar. Key economic indicators and events in the US and Japan will influence market sentiment, while commodities like WTI, Gold, and Silver experienced price movements driven by global developments and central bank decisions. Investors should closely monitor these factors to make informed trading decisions in the coming days.
