The US dollar index (DXY) resumed its broader uptrend ahead of the opening of the US market session on Tuesday. The dollar remains supported by strong US data but bullish attempts are likely to remain limited, as investors await top-tier US issuances, due in the second half of the week, to place directional bets for the US dollar (USD).).
Tuesday’s main attraction will be on the US consumer confidence index and job vacancy figures (JOLTS), which is expected to boost the state of a strong US economy ahead of the release of third-quarter GDP on Wednesday.
The US Dollar Index, which measures the value of the US dollar against the six major currencies traded, is on track for its best monthly performance in more than two years. Strong US data forced markets to trim expectations of a sharp easing cycle by the Federal Reserve, pushing US yields higher and pushing the US dollar with it.
The US dollar index is moving within an ascending channel, recording higher highs and higher lows. The index faces a significant resistance zone between 10,455 and 104.75, as bulls have been limited several times on previous occasions. Above this level, the target is 105.20.
The US dollar continues to rise against the Japanese yen as we are overwhelmed with interest trading again, which of course has been a big gain for us. The 152 yen level below should serve as support now. I think at this point, we may be looking to reach the 155 yen level but keep in mind that we will get weekly job applications and monthly job numbers at the end of the week.
The euro initially tried to rise slightly during Tuesday’s trading session, but gave up gains and showed signs of hesitation.
Dollar Rises, Bitcoin Exceeds $70K
The dollar extended its broad gains today, supported by a rise in the 10-year US Treasury yield, which exceeded 4.3% as expectations of an expansionary fiscal agenda grow after the US presidential election. In parallel, bitcoin rose to above 70,000 for the first time since June, driven by speculation that post-election developments could accelerate efforts to expand the U.S. cryptocurrency market and pave regulatory avenues for wider cryptocurrency adoption.
Amid the dollar’s rise, the pound is emerging as the only major currency that has maintained its flexibility. In contrast, the Australian dollar and the Swiss franc are the weakest performers today. For the Australian dollar, traders are looking forward to crucial CPI data tomorrow, hoping for progress in inflation deflation that will support the RBA shift towards a more neutral stance on inflation. The yen remains weak, with Japanese officials closely watching whether Japanese officials may intervene if USD/JPY approaches the next psychological level at 155.
Technically, Bitcoin is expected to rise further as long as the resistance that turned into support at 69,514 holds. A decisive break of the high at 73812 will confirm the resumption of the long-term uptrend. The next near target would be a 100% forecast from 52703 to 66854 from 58846 at 81742.
In Europe, at the time of writing, the FTSE is down -0.15%. The DAX rose 0.18%. The CAC rose 0.19%. The yield on the 10-year British Treasuries was up 0.039 at 4.303. The yield on the German 10-year Treasuries was up 0.048 at 2.338. Earlier in Asia, the Nikkei rose 0.77%. The Hong Kong Government Bond Index rose 0.49%. China’s Shanghai index fell -1.08%. The Street index rose Times in Singapore up 0.18%. The yield on Japan’s 10-year government bonds rose 0.0021 to 0.977.
U.S. Trade Deficit Widens and Consumer Confidence Improves
U.S. merchandise trade deficit widened to -$108.2 billion vs. forecast -$96.1 billion U.S. merchandise exports fell by -$3.6 billion, or -0.2%, month-on-month to $174.2 billion in September. Imports of goods rose by $10.4 billion, or 3.8%, month-on-month to $282.4 billion. The trade deficit widened from -$94.2 billion to -$108.2 billion, beating expectations that It was at -$96.1 billion.
Wholesale inventories decreased by -0.1% month-on-month to $905.0 billion. Retail inventories rose 0.8% month-on-month to $824.3 billion.
Germany’s consumer climate index for November improved from -21.0 to -18.3, beating expectations of -20.5 and hitting its highest level since April 2022. However, fundamental sentiment remains weak.
as the economic outlook continued its downward trend for the third consecutive month.
falling by -0.5 to -0.2, the lowest level since March.
Rolf Burkel, a consumer expert at NIM, warned that while consumer confidence has improved.
it remains historically low due to ongoing uncertainty driven by “crises, wars and rising prices.”
He noted that rising corporate bankruptcies, job cut plans and discussions about offshoring production “prevent a more significant recovery in consumer confidence.”
Japan’s unemployment rate fell from 2.5% to 2.4% in September, below expectations of 2.5%.
While the total number of employed individuals fell slightly by -0.1% to 67.82 million after seasonally adjusted adjustments, the number of unemployed individuals fell by -2.3% to 1.68 million.
marking the second consecutive monthly decline. In addition, the job availability ratio rose by 0.01% to 1.24, meaning there are 124 jobs for every 100 job seekers, reflecting strong demand for labor.