The US Dollar Index Has Updated Monthly Highs

The US dollar strengthened significantly against a basket of major currencies. The US dollar index (#DX) updated monthly highs and closed in the positive zone (+0.47%). The US currency strengthened even despite the weak report on new home sales. According to the report, in August, the value of sales was revised from 629K to 585K, and in September, the value counted to 553K and turned out to be worse than the forecasted level of 627K.

The growth of the dollar contributed to the decline of the euro and the British pound. The euro continued to fall due to uncertainty about the Italian budget project. Let us recall that the EU rejected the draft proposed by Italy and gave three weeks to correct it. Also, the euro was under pressure due to the German manufacturing activity index (PMI), which counted to 52.3 in September instead of 53.5.

The British pound is under pressure, as negotiations on Brexit have not resumed. Also, British Prime Minister, Theresa May, was criticized for her Brexit strategy.

The “black gold” prices have been declining. At the moment, futures for the WTI crude oil are testing a mark of $66.30 per barrel.

Market Indicators

Yesterday, aggressive sales were observed in the US stock market: #SPY (3.03%), #DIA (2.40%), #QQQ (4.58%).

The 10year US government bonds yield continues to decline. At the moment, the indicator is at the level of 3.113.12%.

German IFO business climate index at 11:00 (GMT+3:00);ECB interest rate decision at 14:45 (GMT+3:00);Core durable goods orders in the US at 15:30 (GMT+3:00);Pending home sales index in the US at 17:00 (GMT+3:00).

by JustMarkets, 2018.10.25