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The US dollar began the trading week with negative performance, extending its Friday’s decline at the opening, but the dollar gradually edged higher as the day went by. The American currency closed with modest gains against most major rivals while traders and investors are eying significant events scheduled later in the week. The EUR/USD pair ended the day little changed, around 0.9870.
Economic Data
European and US stock indexes managed to close Monday with gains, despite growth-related data were generally discouraging, as most S&P Global PMIs missed expectations. The October flash PMIs indicated a steeper contraction in the Union and the United States at the beginning of the fourth quarter.
Chinese data published at the beginning of the day was mostly positive. The third quarter Gross Domestic Product beat expectations, up by 3.9% QoQ.
September’s Trade Balance posted a surplus of $84.74 billion, better than anticipated, while Industrial Production rose by 6.3% YoY. Finally, Retail Sales increased by 2.5% YoY, up, although below the market’s forecast of 3.3%. Also, the country announced it would raise fuel prices on Tuesday, weighing on local equities.
Other Developments
Tensions between Germany and Russia continue. The German Chancellor Olaf Scholz said the Western nations want Ukraine to become an EU member state. On the other hand, Moscow has asked UN Secretariat for data on Ukrainian grain and its destinations and end consumers, and Russian Foreign Minister Lavrov hinted at “corrections” to the Black Sea grain deal.
The USD/JPY pair maintained volatile performance, ending the day roughly 450 pips up after bottoming at 145.37. Japan’s Prime Minister Fumio Kishida anticipated an upcoming stimulus package to be announced by the end of October as planned. Bank of Japan suspected intervention last week was estimated at 5.5 trillion yen.
Rishi Sunak became the new United Kingdom Prime Minister after Liz Truss’s failed 44-day government. GBP/USD ended the day in the red, around 1.1280.
Gold trades at around $1,650 per ounce, marginally lower on a daily basis, while crude oil prices were little changed. WTI settled at $84.70 a barrel.
In the upcoming days, several central banks will announce their monetary policy decisions. The Bank of Canada, the Bank of England and the ECB will make their policy decisions. The Reserve Bank of Australia and the US Federal Reserve will announce their decisions next week.
The US will publish the preliminary estimate of its Q3 Gross Domestic Product, foreseen reverting the negative trend of the first two quarters of the year.
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