Dollar Rallies on Solid Job Gains, Treasury Yields Rise

Dollar Rallies on Solid Job Gains, Treasury Yields Rise


The Dollar Index which measures the greenback against a basket of major currencies bounced-off a ten-day low of 95.99, supported by a strong job report. The data showed that the US economy created 250 thousand jobs during October versus an expectation of 193 thousand, and the Unemployment Rate held steady at 3.7%, the lowest since 1969. Moreover, the Average Hourly Earnings rose to 3.1% to log their largest growth in almost ten years. The Treasury yields rose on the report, as the data provides support to the Federal Reserve to further tighten the monetary policy. The 10-year yields tested a three-week high of 3.224.


The British pound kicked-off the week on a strong note following reports that Britain and the European Union are very close to seal a deal. During last week, the Cable rebounded from a ten-week low of $1.2696 on the news that Theresa May reached a deal with the EU concerning financial services. Brexit headlines remain a primary mover for pound pairs. The GBPUSD is trading near the $1.30 level.


Gold prices held steady above the $1230 ahead of the US midterm elections. Market participants expect an increase in market volatility which could support the precious metal. On the other hand, the silver ounce is hovering near a two-month high at $14.70.


Oil prices remain weak despite the start of the US sanctions on Iran's oil exports. The United States granted waivers to eight importers of the Iranian oil which calmed down the woes of tight supply. The West Texas Intermediate crude futures traded at a seven-month low of $62.51, and the Brent futures tested a ten-week low of $72.20. The US energy services firm Baker Hughes reported that the US oil rig count fell to 874 from 875 prior.

Major Economic Events

GMT Country Event Expectation Previous
9:30 UK Services PMI (Oct) 53.3 53.9
13:10 CA BoC Gov Poloz Speaks     
15:00 US ISM Non-Manufacturing PMI (Oct) 59.3 61.6


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