News

Dollar Extends Gains, Stock Futures Recover on Powell

Dollar

The dollar index, which measures the greenback against a basket of major currencies, added to prior gains trading near a two-month high of 94.25. Investors favored the US dollar to its rivals following a surge in cases in the United Kingdom and the Eurozone, which triggered concerns over the economic recovery and raised the chances of further easing actions from central banks. On the other hand, the Federal Reserve Chairman Jerome Powell stated that the US economy showed resilience during the past months, boosting sentiment. Market participants are looking forward to fresh insights from Powell's testimony later today and tomorrow. The EURUSD declined to $1.1672, the GBPUSD tumbled to $1.2679, and the risk-sensitive AUDUSD dropped to $0.7113.

Equities

Major US stock index futures recovered sharply, as Powell confirmed in his congressional testimony that the Federal Reserve would do whatever it takes for as long as it takes to support the US economy and reach the Fed's mandates. Also, he marked that there are quite improvements in some indicators, but the outlook remains highly uncertain. The Dow Jones Industrial Average futures rose to 27318, the S&P500 futures rallied to 3308, and the Nasdaq futures added to prior gains racing higher to 11152.

NZD

The Reserve Bank of New Zealand concluded its monetary policy review by keeping settings unchanged. Interest rates remained at their historically low levels of 0.25%, and the Large-Scale Asset Purchase program at NZD100 billion. The board expressed its willingness to act further if needed and reiterated that negative interest rates are among the instruments that are on the table. The NZDUSD tumbled to a one-month low of $0.6591.

Metals

Precious metals prices continued to decline as the US dollar raced higher. The value of a gold ounce tumbled to $1874, the price of a silver ounce plunged to almost a three-month low of $23.07, and palladium futures fell to $2184.

Oil

Oil prices eased slightly during the Asian session as the private oil stock data showed a buildup of 0.691 million barrels in inventories. Market participants are looking forward to the official figures by the US Energy Information Administration later today. On the other hand, the resurgence of Covid19 in European currencies is raising concerns over the economic recovery and future oil-demand levels. The West Texas Intermediate crude November delivery descended to $39.25, and Brent Blend November delivery declined to $41.18.

Major Economic Events

GMT Country Event Expectation Previous

8:30

UK

 Manufacturing PMI 

54.3

55.2

8:30

UK

 Services PMI 

54.5

55.0

13:45

US

 Manufacturing PMI (Sep) 

53.1

53.1

13:45

US

 Services PMI (Sep) 

54.7

55.0

14:00

US

 Fed Chair Powell Testifies 

-

-

14:30

US

 Crude Oil Inventories

-

-4.389

 

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