This month’s recovery in the Dollar Index (DXY) from 101.2 will likely be capped around 103.30, DBS’ FX analyst Philip Wee notes.
Waiting for Fed speakers
“The futures market has trimmed its Fed cut bets, aligning with the Fed’s projection for two 25 bps cuts in November and December. Fed officials have played down the higher-than-expected US nonfarm payrolls and CPI inflation readings.”
“This week’s Fed speakers should uphold the narrative that the US economy and labour market are back in better balance compared to two years ago, allowing inflation to return to the 2% target next year.”
“The International Monetary Fund (IMF) will release the World Economic Outlook on October 16 and agree with the Fed regarding the scope for high interest rates to move from restrictive towards neutral levels.”
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The continuation of the advance in the US Dollar and increasing scepticism surrounding the Chinese stimulus measures weighed on the Australian Dollar and sent AUD/USD back to the 0.6700 neighbourhood in quite a negative start to the week.
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Further weakness hurt the single currency and the broad risk-linked universe on Monday, motivating EUR/USD to break below the 1.0900 support and clinch new multi-week lows ahead of key data releases and the ECB meeting.
Gold consolidates around $2,650
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XRP gears up for gains as Ripple Swell conference goes live this week
Ripple (XRP) trades above $0.5400 early on Monday. The altcoin added over 2% to its value on the day, ahead of a key event. Ripple, a cross-border payment remittance firm, is gearing up for its annual conference called Ripple Swell.
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The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
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