The US Dollar continued to strengthen, reaching close to three-month highs due to higher yields and a renewed interest in the “Trump trade” among investors. On Tuesday, October 22, the US Dollar Index (DXY) approached the key 104.00 barrier supported by rising US yields. The Richmond Fed Manufacturing Index and a speech by the Fed’s Harker are on the agenda for the day.
EUR/USD experienced a deep pullback, nearing the 1.0800 region as attention turned to the ECB. Lagarde, McCaul, and Lane are all scheduled to speak, adding to the uncertainty surrounding the Euro against the US Dollar. Meanwhile, GBP/USD fell below the key support level of 1.3000 as the US Dollar gained strength. Public Sector Net Borrowing figures and a speech by the BoE’s Bailey are scheduled to be released.
In Japan, USD/JPY reached multi-week highs above 150.00 thanks to strong US and Japanese yields. The next events to look out for in Japan include the weekly Foreign Bond Investment figures and the preliminary Jibun Bank Manufacturing and Services Index. AUD/USD, on the other hand, dropped to six-week lows around 0.6650 due to concerns from China, a stronger US Dollar, and weaker commodity prices.
Prices of WTI reversed six consecutive days of losses on Monday, climbing above the $70.00 mark per barrel. Meanwhile, Gold prices surged to a record high around $2,740 per ounce in response to the stronger US Dollar and rising US yields. Silver prices also rose above $34.00 per ounce for the first time since November 2012.
Overall, the US Dollar remained strong against major currencies, supported by higher yields and a resurgence of the “Trump trade”. Investors are closely watching key economic indicators and central bank speeches for further direction in the currency markets. Additionally, geopolitical tensions and economic data from China continue to impact commodity prices and influence currency movements.
