The Daily Market Roundup: October 2
US Dollar Strengthens Amid Data Releases and Geopolitical Tensions
The US Dollar (USD) continued its bullish run on Tuesday, reaching a two-week high above 101.00 on the USD Index. Key events impacting the market include:
- The European Commission releasing Unemployment Rate data for August.
- The US ADP Employment Change data for September.
- Comments from Federal Reserve officials, including Fed Governor Michelle Bowman and Richmond Fed President Thomas Barkin.
Major Currency Prices: USD Dominates Against Japanese Yen
The US Dollar showed strength against major currencies this week. The heat map below displays the percentage changes:
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.87% | 0.66% | 1.20% | -0.20% | 0.14% | 0.71% | 0.54% |
Explanation of heat map: The base currency is from the left column, and the quote currency is from the top row. For example, USD (base)/JPY (quote) shows the percentage change between the US Dollar and Japanese Yen.
Market Impact: Wall Street Turns Bearish Amid Geopolitical Tensions
The US Bureau of Labor Statistics reported a rise in JOLTS Job Openings but a contraction in the Manufacturing PMI, leading to a downturn in Wall Street indexes. Geopolitical tensions, including Iran’s missile attack on Israel, further heightened risk aversion in the market.
Currency Updates: EUR/USD, GBP/USD, USD/JPY, and Gold
- EUR/USD: Traded above 1.1050 after three consecutive days of losses.
- GBP/USD: Held below 1.3300 after dropping to a September low.
- USD/JPY: Approached 144.00 as Japan’s Consumer Confidence Index improved.
- Gold: Rose over 1% amid geopolitical tensions but faced resistance near $2,650.
Risk Sentiment FAQs
Understanding “risk-on” and “risk-off” market dynamics:
- Risk-On: Investors are optimistic and willing to take risks.
- Risk-Off: Investors turn cautious and seek safe-haven assets.
During “risk-on” periods, stocks, commodities (except Gold), and certain currencies rise. In “risk-off” markets, Bonds, Gold, and safe-haven currencies like JPY, CHF, and USD perform well.