On Monday, the US Dollar Index fell slightly at the 106.00 mark after trading primarily in positive territory during the day. The DXY began the week on a high note thanks to Middle East developments that influenced market mood. The Greenback, however, lost impetus later in the day as the market stabilized and US rates continued to fall.
There are no top-tier US reports slated for release on Tuesday. Inflation numbers will be the focus of this week’s economic data, with the Producer Price Index (PPI) on Wednesday and the Consumer Price Index (CPI) on Thursday.
The Middle East scenario has the potential to have an impact on markets, with further escalation potentially harming market sentiment and raising demand for safe haven currencies and crude oil prices. The current circumstances might become a “Black Swan” occurrence, drastically altering the outlook.
The Japanese yen was one of the best-performing currencies, aided by a drop in global bond rates. German 10-year rates fell by nearly 5% to 2.76%. The USD/JPY fell from below 149.00 to 148.35.
During the American session, the EUR/USD recovered some of its losses, trading over 1.0560. In the short term, the pair retains a little bullish tilt but stays confined below 1.0600. On Monday, the Euro underperformed and was the weakest of the G10 currencies. German industrial production fell 0.2% in August, while Eurozone Sentix Investor Confidence fell to -21.9 from -24 predicted.
GBP/USD closed flat, maintaining around 1.2240, aided by some US Dollar weakening. The pair is still trading below but close to the 20-day Simple Moving Average (SMA) of 1.2270.
Late on Monday, the AUD/USD gained traction, breaking over the 20-day simple moving average and topping 0.6400. The Westpac Consumer Confidence Index for October and the National Australian Bank’s Business Survey are slated for release on Tuesday.
The Canadian Dollar gained ground when crude oil prices rose. USD/CAD fell for the third consecutive day, reaching a one-week low below 1.3600.
NZD/USD closed over 0.6000 for the first time in nearly two months. On Monday, the pair’s rise was helped by a lower US dollar and increased risk sentiment.
Please note that this article does not offer any instructions or suggestions regarding investment decisions. It is important for you to conduct your own research or seek professional advice from a qualified professional before conducting an investment decision.