Market Drivers; US Session

Dollar Strengthens Amid Rising Yields, Renewed “Trump Trade”

The US Dollar Index (DXY) continued its upward trajectory on Tuesday, October 22, approaching three-month highs as investors responded to higher interest rates and a resurgence of the “Trump trade.” Key economic events and speeches from Federal Reserve officials will shape the market’s direction.

Currency Pair Highlights:

EUR/USD: The euro weakened against the dollar, nearing the 1.0800 level. European Central Bank (ECB) policymakers, including Christine Lagarde, Philip Lane, and Fabio Panetta, are scheduled to speak.

GBP/USD: The British pound fell below the 1.3000 support level. UK public sector net borrowing figures and a speech by Bank of England Governor Andrew Bailey are anticipated.

USD/JPY: The yen declined further, with the dollar reaching multi-week highs above 150.00. Japan’s weekly Foreign Bond Investment figures and the preliminary Jibun Bank Manufacturing and Services Index are upcoming.

AUD/USD: The Australian dollar weakened to six-week lows due to concerns about China’s economy, a stronger US dollar, and declining commodity prices. The Judo Bank Manufacturing and Services PMIs will be released on October 24.
Commodities:

Oil: West Texas Intermediate (WTI) crude oil prices rebounded above $70 per barrel after a six-day losing streak.

Gold: Gold prices reached a record high of around $2,740 per ounce troy, driven by the stronger US dollar and rising interest rates.

Silver: Silver prices surpassed $34 per ounce for the first time since November 2012.

Overall, the US dollar’s strength is being supported by a combination of economic factors and market sentiment. Investors will be closely watching developments in the US and global economies, as well as central bank policies, to gauge the outlook for the dollar and other currencies.