The US Dollar (USD) continued its upward trajectory on Tuesday, reaching six-month highs as traders anticipated the Federal Reserve's (Fed) next move following their recent meeting. The market's focus is on the possibility of the Committee maintaining its current stance in December, which has kept the USD in high demand. However, the ongoing government shutdown in Washington remains a pressing issue, with no immediate resolution in sight.
On Wednesday, November 5, investors should keep a close eye on several key indicators:
The US Dollar Index (DXY) has been on an upward streak, breaking through the 100.00 psychological barrier and challenging multi-month highs. It will be interesting to see if this trend continues with the release of the weekly MBA Mortgage Applications, ADP Employment Change, the final S&P Global Services PMI, the ISM Services PMI, and the EIA's weekly US crude oil stockpiles report.
The EUR/USD pair has weakened, falling below the 1.1500 support level for the first time since August. This decline coincides with the release of Germany's Factory Orders, the final HCOB Services PMI for Germany and Euroland, and Producer Prices across the broader European bloc.
The British Pound (GBP) continues to face selling pressure, with GBP/USD hitting new multi-month lows in the 1.3020-1.3010 range. The final S&P Global Services PMI will be a crucial indicator for the British currency.
USD/JPY traded defensively, reversing Monday's gains and dropping to three-day lows near 153.30 due to a persistent risk-off sentiment. Japan's Average Cash Earnings, the Reuters Tankan Index, and the final S&P Global Services PMI will be closely watched.
AUD/USD fell to multi-day lows, breaking below the 0.6500 support level after the Reserve Bank of Australia's (RBA) cautious approach and the strong performance of the US Dollar.
WTI crude oil prices remained within a recent range, hovering around $60.00 per barrel, despite oversupply concerns and a stronger US Dollar.
Gold prices experienced a significant drop, returning to the $3,930 zone per troy ounce, influenced by the stronger US Dollar and reduced expectations of a Fed rate cut in December. Silver prices followed suit, falling for the third consecutive day and breaking below the $47.00 per ounce mark.
