Dollar Holds Steady After Mixed U.S. Jobs Data


The dollar index which measures the strength of the greenback against a basket of major currencies edged slightly higher during the Asian session to reverse Friday's losses. The dollar came under pressure following the September Jobs data, which showed that the average hourly earnings grew at 0.3%, and the U.S. economy created 134 thousand jobs versus an expectation of 185 thousand. However, the previous figure was revised higher to 270 thousand from a reading of 201 thousand, and the unemployment rate fell to 3.7%, the lowest since 1969, while the participation rate held steady at 62.7%. In general, the report should not affect the interest rate path of the Federal Reserve in the long run which should be positive to the dollar. The DXY found support at a low of 95.52 and is trading above Friday's open at 95.75. The U.S. Treasury yields continued higher, where the U.S. 10-year yields rose to 3.248%, the highest since 2011. On the other hand, the greenback rallied against the Chinese Yuan to trade at a high of 6.9052, the highest since August 15. China's Central Bank injected a total of 750 billion Yuan to the financial system by lowering the Bank's Reserve Requirement for the fourth time this year. The central bank is trying to support the economy that is being affected by the trade dispute between China and the United States.


The British Pound advanced to a ten-day high against the United States Dollar on higher hopes of a Brexit deal. The European Union negotiators believe that a deal with Britain is very close. The GBPUSD traded at a high of $1.3135. On the other hand, the EURGBP fell to a low of 0.8775, as the Euro weakened due to the Italian Budget concerns and the Pound rose on higher chances of a Brexit deal.


Metals prices drifted lower during the Asian session as the dollar rallied. The gold ounce tumbled to a one-week low of $1196, weighed down by higher yields and a firmer dollar. On the other hand, the silver ounce fell to $14.44.


Oil prices are trading lower for the third consecutive day as the United States is planning to grant some waivers on Iran's crude sanctions. Oil prices traded at a four-year high during the past week on fears that the U.S. sanctions will lead to a lower oil market supply. However, U.S. waivers and output increase by Russia and Saudi Arabia drove prices lower. The West Texas Intermediate crude futures traded at a low of $73.57 per barrel, and the Brent futures tumbled to $83.23 per barrel. The U.S. energy services firm Baker Hughes reported on that the U.S. oil rig count fell to 861 from 863.

Major Economic Events

GMT Country Event Expectation Previous
8:30 EU Sentix Investor Confidence 11.4 12.0


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