Nov 7
VOT Research Report
Analytics and Considerations
After a significant post-NFP sell-off on Friday, the US dollar is still declining.
The dollar is getting close to a significant area of support.
With no definite positive catalyst, risk markets are surging higher at the start of the week, extending Friday’s sell-off in the US dollar. In despite the high US Treasury yields, equity markets are rising, the VIX is falling, and gold is testing major resistance. The 10-year bond is seen around 4.14%, while the 2-year UST is listed at roughly 4.68%. While the Fed raising rates by yet another 75 basis points on Wednesday and cautioning that the market may not have completely reflected the central bank’s objective to control inflation, there is still a lot of risk-taking enthusiasm.
Fed Adjusts Guidance and Raises Rates by 75 Basis Points; US Dollar Sentiment After FOMC
More jobs were generated than anticipated in Friday’s US Jobs Report (NFPs), although the jobless rate increased a little more than anticipated.
Employment Report for October: 261,000 Payrolls Added. Where Will the US Dollar Go Next?
The probable lifting of covid restrictions in China is one persistent rumor put up as the cause of the increase in risk. This rumour first surfaced around a week ago, sending Asian stock markets soaring, but the Chinese government has consistently refuted it. It’s not a smart idea to justify taking on risk based on a China-based hearsay.
The most recent analysis of US inflation ought to provide the market with a clearer directness on Thursday, though a number of Fed speakers this week, starting with Collins, Mester, and Barkin today, may obscure this.
The daily USD chart emphasizes the decline from Friday and the gradual decline that has been occurring since the high print of September 28. The support zone at 109.30 and 110.30, which has resisted numerous efforts to break lower, is now within striking distance of the USD. It is possible to get below 108 if this breach is verified. The dollar’s current position is neutral to negative since it is under both the 20- and 50-day moving averages.
