Dollar strengthens as US PMI beats expectations; AUD outperforms ahead of AUS inflation data
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During the Asian session, the key data to watch will be Australian inflation figures. Later in the day, Japan will release the Leading Economic Index. Additionally, the German IFO survey results are due. The Bank of Canada will announce its decision on monetary policy. Here is what you need to know on Wednesday, October 25: The US Dollar rebounded on Tuesday, supported by positive economic data. The US PMIs exceeded expectations and highlighted the divergence between the US economy and others, indicating that fundamentals still favor the US Dollar. The US Dollar Index (DXY) rebounded from monthly lows below 105.50 to 106.30. US Treasury yields remained relatively steady, with the 10-year yield below the 5% level and the 2-year yield rising to 5.10%. Key US data, including Q3 GDP and consumer inflation, is scheduled for release on Thursday. Despite improved risk sentiment, the Greenback strengthened during the American session. The Dow Jones gained 0.62% and the Nasdaq rose by 0.93%. Eurozone PMIs indicated a significant contraction in Gross Domestic Product in October and lower inflation. These data further reinforce expectations that the European Central Bank (ECB) will keep interest rates unchanged on Thursday. EUR/USD reversed Monday’s gains, falling from near 1.0700 to below 1.0600. The pair managed to hold above the 20-day Simple Moving Average (SMA), but upward momentum evaporated. Analysts at Commerzbank on Eurozone PMI: The signs of a recession in the euro area are growing. The Purchasing Managers’ Index for the service sector, the most reliable economic barometer for the euro area, fell again in October by 0.9 points to 47.8. It has thus been clearly in recession territory for three months. The index for the manufacturing sector, at 43.0, also gives no hope of a turnaround. Another ECB interest rate hike in the coming months is becoming…
Filed under: News - @ October 25, 2023 4:18 am