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The US dollar gave up during the US session, finishing the day with losses against its major rival currencies. The EUR/USD pair trades near parity early Wednesday and ahead of important monetary policy announcements scheduled for next Thursday.
Commodity-linked currencies benefited from higher US equities. AUD/USD flirts with 0.6500 while the USD/CAD is about to pierce the 1.3600 level.
A dollar’s sell-off unexpectedly aided the Bank of Japan. USD/JPY trades below 148.00 as investors moved away from the safe-haven greenback.
Gold edged marginally higher and trades at around $1,653, while crude oil prices finished the day little changed. WTI currently trades around $84.90 a barrel.
Economic Data
Consumer confidence in the US deteriorated in October. The US Dollar Index trades deep in negative territory below 111.00. the Dollar Index reading at the time of writing is 110.84. The Consumer Confidence Index declined to 102.5 in October from 107.8 in September (revised from 108). This reading came in worse than Reuters’ estimate of 105.9.
The monthly data published by the US Federal Housing Finance Agency showed on Tuesday that the Housing Price Index fell by 0.7% on a monthly basis in August. This print followed July’s decrease of 0.6% and came in lower than the market expectation of -0.3%.
The S&P/Case-Shiller Home Price Index printed 13.1% on a yearly basis in August, compared to analysts’ estimate of 14.4%.
Other Developments
The GBP/USD pair settled at 1.1465, helped by the broad dollar’s weakness and despite of continued UK political noise. The new Prime Minister, Rishi Sunak anticipated “difficult decisions” ahead. Justice Secretary Brandon Lewis and Business Secretary Jacob Ress-Mogg have resigned. Jeremy Hunt has been reappointed finance minister.
On Wednesday, the focus will be on the Bank of Canada’s monetary policy decision. The European Central Bank will announce its latest monetary policy decision.
The central bank is expected to hike rates by 75 bps, upgrading the pace of tightening amid signs of a fast deterioration in economic conditions. The focus will be more on what policymakers are planning ahead rather than on the actual hike. Market players would be quite surprised if President Christine Lagarde comes out with a hawkish message.
Also Read
Improved sentiment pushes US stocks higher
UK politics save the day of GBP/USD
WTI rises amid raised appetite
Sunak, UK Economy Prepare For Difficult Tests
USD/CAD hovers around 1.3632 ahead of BoC’s decision
AUD/USD rallies as the US dollar retreats
