The US Dollar Gains Momentum
- The US Dollar is entering its fourth straight day of gains, driven by safe-haven flows and geopolitical tensions in the Middle East.
- Reports of explosions in Beirut further support the US Dollar as a safe-haven currency.
- The US Dollar Index tests the upper band of its September range, signaling a potential breakout on Thursday.
The US Dollar (USD) is showing strength on Thursday, bolstered by various factors:
- Increased geopolitical tensions in the Middle East.
- A weaker Japanese Yen (JPY) due to comments from the new Japanese prime minister.
- Diminishing chances of a large interest-rate cut by the US Federal Reserve (Fed) in November.
Daily Digest Market Movers: Key Highlights
- New Japanese prime minister Shigeru Ishiba’s comments on the economy impact the Yen’s value.
- Bank of England (BoE) Governor Andrew Bailey hints at potential interest rate cuts.
- US economic data, including Challenger Job Cuts and Jobless Claims, influence market sentiment.
- Upcoming releases from S&P Global Services PMI and ISM provide further insights into economic health.
US Dollar Index Technical Analysis
Technical analysis indicates:
- The US Dollar Index (DXY) has seen a strong recovery, reaching the upper cap at 101.90.
- A possible rejection at this level could lead to a consolidation or a pullback towards the lower end of the range.
- Key resistance levels include 101.90, 102.09 (55-day SMA), and 103.18.
- Support levels are at 100.62, 100.16, and 99.58.
Risk Sentiment FAQs
Understanding risk sentiment in financial markets:
- In a “risk-on” market, investors are optimistic and willing to take risks.
- In a “risk-off” market, investors prioritize safety and avoid risky assets.
- Asset classes like stocks, commodities, and currencies react differently based on risk sentiment.