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USD Stands Tall

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On Monday, USD surged vs. a basket of currencies as U.S. manufacturing sector gained more momentum in September. The ISM Manufacturing data rose to 51.5 in September from 49.4 in August. The U.S. dollar index rose by 20 pips and settled at 95.60 pips.

Also on Monday, the Pound declined to a near 31-year low against the USD and to a three-year low vs. EUR after the UK Prime minister Theresa May set a March deadline for the formal departure process from the EU to begin. In addition, Theresa May said, she was determined to move on with Brexit and win the "right deal" in an effort to ease fears inside her party that she may delay the split with the EU.

GBP declined to $1.28 vs. USD negatively affected by Theresa May's Brexit speech at the Conservative conference. GBP could trade under pressure during the coming period and is likely to decline further to $1.25, if it fails to re-test the previous bottom levels.

On Monday, gold prices declined as the USD surged on stronger than expected US manufacture data and traders await the U.S. nonfarm payroll report later on this week for clues about whether US interest rates would increase before the end of the year.

Gold fell to $1,310 at the end of yesterday’s trading session and is expected to trade sideways in anticipation of the U.S. nonfarm payroll, which will be released this Friday.

Oil prices settled yesterday and Brent traded at its highest level in three months at $50. U.S. crude traded at $49 yesterday and could touch $50 with some correction.

The most important economic events:

  • GBP Markit/CIPS UK Construction PMI (SEP): (GMT 10:30) Medium – Forecast (94) – Previous (49.2).
  • NZD Dairy Auction Avg. Winning Price MT (OCT 4): (GMT 14:00) Important – Forecast (N/A) – Previous ($2,975).
  • NZD Dairy Auction Whole Milk Powder MT (OCT 4): (GMT 14:00) Important – Forecast (N/A) – Previous ($2,782).

Disclaimer
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.

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