Market Drivers – US Session, October 3

Gold fell for the seventh day in a row, reaching a low of $1,814 before reversing course and edging slightly higher to $1,825. After dropping more than 5% in the previous session, silver made a slight recovery to close at about $21.20.

On Tuesday, the Yen increased, most likely as a result of a Japanese government intervention to stop further currency devaluation. The move dropped the pair as low as 147.28 when USD/JPY was trading above 150.00. Later on, though, it cut its losses and climbed to $149.00. The short-term trend is negative, and volatility is anticipated.

Overall strong US data, higher rates, and cautious market sentiment continue to support the US currency. Stocks on Wall Street fell by an average of 1.40 percent on Tuesday. The ADP Employment report is due on Wednesday.

Economic Data

US JOLTS Job Openings came in above expectations and pushed US yields higher. The 10-year yield reached 4.80%, the highest since 2007. The US Dollar Index climbed to 107.34, the highest since November of last week, but pulled back with the USD/JPY retreat, ending the day slightly below 107.00.

Key Developments

The EUR/USD currency pair made a new ten-month low close to 1.0450 before mildly recovering to 1.0470. The two are still under duress. Retail Sales and the Producer Price Index are scheduled to be released by Eurostat on Wednesday.

GBP/USD ended the day unchanged, fluctuating near 1.2070. Following US data, the pair hit its lowest point since March at 1.2052.

Following a lower-than-anticipated reading of the Swiss Consumer Price Index (CPI) for September, with the annual rate growing from 1.6% to 1.7%, below the anticipated 1.8%, the Swiss Franc weakened. USD/CHF reached a top of 0.9244 before reversing course around 0.9200.

On Wednesday, the Reserve Bank of New Zealand (RBNZ) will make its choice public. The key rate is anticipated to stay at 5.5%. Despite falling below the 20-day Simple Moving Average (SMA), NZD/USD was able to recover and move back over 0.5900.

Due to the risk-off mood and the strengthening dollar, AUD/USD fell for the second day in a row. The two crossed a threshold below 0.6300, which was last seen in November 2022.

For the third day in a row, USD/CAD increased, surpassing September highs. Inching closer to March highs at 1.3861, the pair closed above 1.3700.

What to watch on Wednesday

During the Asian session, the key event will be the Reserve Bank of New Zealand monetary policy decision. Throughout the day, the final Service PMIs will be released. Eurostat will report the Producer Price Index and Retail Sales. The US will report the ISM Services PMI and Factory Orders. ADP will release its private employment report.

Also Read:
WTI slightly recovers as supply constraints remain a concern

EUR/USD crosses new yearly lows ahead of EU Retail Sales, NFP

GBP/USD continues challenging the 1.2000 mark

Canada’s dollar sinks on US dollar’s momentum

Fed’s Bostic sees no urgency for doing anything more about interest rate