US Dollar traded mixed, with some profit taking following another vicious week.
On Friday, the US Dollar (USD) had another solid day, gaining versus practically every major G20 currencies. The Greenback rises, supported by rising US rates, in a situation. Where the rate disparity appears to be the key factor in determining which currency falls and which gains. With the US 10-year yield reaching 4.51%, breaking beyond the October 2007 peak. It appears like King Dollar is reaffirming its rightful status.
The US PMI statistics will be the focal point to conclude the week.
There might be some festivity may be tempered depending on the US Purchasing Managers Index (PMI) data issued later Friday by S&P Global. The statistics will give new insight into the status of the country’s core industrial and services sectors in September. After August data revealed that manufacturing activity contracted and services expanded just slightly. If both figures go fully into contraction, expect some unwinding of US Dollar long holdings by the weekend.
Daily Summary :The US Dollar Index is nearing a fresh six-month high.
US Dollar seeks confirmation from PMIs Strikes in the big three car procedures continue. With no favorable headlines to share before of the Friday deadline.
There is no new information to share on the upcoming US government shutdown.
Traders will be on edge as the S&P 500 approaches 13:45 GMT. The Manufacturing Purchasing Managers Index (PMI) is projected to rise from 47.9 to 48. While the Services PMI is likely to rise from 50.5 to 50.6. The Composite PMI, which measures the performance of both manufacturing and services, has likewise remained relatively stable at 50.2.
The Baker Hughes US Oil Rig Count will be released at 17:00 GMT. 515 was the previous number. Energy continues to be a weakness in the inflation bundle that the Fed cannot manage in order to return inflation to 2%. With Baker Hughes Rig Count numbers continuing very low in recent months, an energy deficit in the US might persist over the winter, driving energy prices even higher.
Significant dispersion in the Equity markets: The Japanese Nikkei and Topix are down 0.50%. Both the Hang Seng and the CSI 300 indices in China are up more than 1.50%. Equities in Europe are beginning flat, but US futures are in the green.
According to the CME Group FedWatch Tool, US Dollar markets are pricing in a 73.8% possibility that the Federal Reserve will hold interest rates steady at its November meeting. The final rate increase is likely in either December or January.
The benchmark 10-year US Treasury yield reached 4.51% at one time, the highest since October 2007. It eventually dropped back to 4.48%. The rate difference narrative continues to be the primary driver in the currency market.
