News

Dollar Extends Gains as European Currencies Plunge

Dollar

The dollar index, which measures the greenback against a basket of major currencies, added to prior gains, rising to 93.67. The greenback is finding support for the fading chances of a massive fiscal stimulus bill, and the resurgence of COVID19 in Europe, which is forcing the closure of economic activity again. On the other hand, the solid inflation figures relative to rival economies backed the dollar. The EURUSD declined to $1.1728, the GBPUSD tumbled to $1.2863, weighed down by Brexit developments, and the risk-sensitive AUDUSD dropped to $0.7152.

Equities

Major US stock index futures traded sideways after running into profit-taking following a significant upside rally over the past couple of weeks. Investors are awaiting any developments over reaching a deal to support the economic activity with additional fiscal measures. However, it seems like both the Democrats and Republicans are not ready to reach a compromise. On the other hand, the risk appetite is taking a hit as Eli Lilly announced pausing the trial of coronavirus antibody treatment, following Johnson and Johnson's announcement. The Dow Jones Industrial Average futures held steady near 28630, the S&P500 futures traded above 3500, and Nasdaq futures hovered around 12140.

Metals

Precious metals prices remained under pressure as the dollar continued to gain strength. The price of a gold ounce traded slightly above $1890 after crashing from $1925 to $1886, the price of a silver ounce held steady near $24.15, and palladium futures recovered to $2370.

Oil

Oil prices drifted lower on growing woes over demand. Market participants are afraid that a second wave could disrupt the economic recovery and weigh on oil-demand levels. The West Texas Intermediate Crude November delivery dropped to $39.84, and Brent blend declined to $42.13.

Major Economic Events

GMT Country Event Expectation Previous

9:00

EZ

Industrial Production (MoM) (Aug)

0.8%

4.1%

12:30

US

 PPI (MoM) (Sep)

0.2%

0.3%

20:30

US

 API Weekly Crude Oil Stock

-

0.951

 

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