The dollar index (DXY00) on Friday fell into -0.12%. The continuous closure of the United States government weighed in the dollar when the closure entered its third day on Friday. The more the closure is maintained, the more likely to suffer the economy of the United States and the growth of GDP will stagnate, a negative factor for the dollar. The dollar extended its losses on Friday after the ISM SEP services index fell more than expected to a minimum of 4 months. The dollar recovered from its worst level on Friday due to the aggressive comments of the president of the Fed of Chicago, Austan Goolsbee and the president of the Fed of Dallas, Lorie Logan, who warned against additional Fed tariff cuts.
The PMI composed of SEP SEP of the USA. UU. It was reviewed up to +0.3 to 53.9 of the 53.6 previously reported.
The US ISM Services Index. Uu. The price of SEP ISM Services paid the unexpectedly paid subscript increased +0.2 to 69.4, higher than the expectations of a decrease to 68.0.
The president of the Chicago Fed, Austen Goolsbee, warned against the Fed with too many interest rates cuts, saying: “The increase in inflation that we have been seeing, together with the works, the payroll numbers that deteriorate, has put the Fed in a little sticky place in which it is receiving the determination of both sides of the mandate at the same time.”
The president of the Fed of Dallas, Lorie Logan, said that the Fed “must be cautious about more rates cuts from here”, since inflation is further from the objective of the Fed than the maximum objective of employment.
The markets have a price at a 97% probability of a -25 BP rate cut at the next FOMC meeting from October 28.
EUR/USD (^Eurusd) on Friday increased by +0.22%. The weakest dollar on Friday supported the euro. In addition, the aggressive comments on the Friday of the Governing Council of the ECB Wunsch gave an impulse to the euro when he declared that the current ECB policy configuration is appropriate to keep inflation controlled. The earnings in the euro were limited after the prices of the EUROZONA SEP producer contracted more than expected, a palm factor for the ECB policy.
The euro also has the support of the divergence of the Central Bank, since the markets consider that the ECB is largely finished with its rate cutting cycle, while the Fed is expected to reduce the rates approximately twice more for the end of this year.
Eurozone SEP PPI fell -0.3% m/my -0.6% and/y, weaker than the expectations of -0.1% m/my -0.4% and/a, with -0.6% and/and the highest annual decrease of 9 months falls in 9 months.
The Governing Council member of the ECB, Wunsch, said that the ECB policy formulators have found the “perfect calibration” for interest rates and policy configuration, which is appropriate to ensure that consumer prices increase in line with the objective of 2% in the medium term.
Swaps have a price in a 1% probability of a rate of -25 BP rate for the ECB at the October 30 policy meeting.
USD/JPY (^usdjpy) on Friday increased by +0.15%. The YEN was under pressure on Friday after the August unemployment rate of Japan increased more than expected up to a maximum of 13 months, a slope factor for Boj’s policy. In addition, the comments of Dovish of the governor of Boja were bassists for the Yen when he emphasized the importance of maintaining the accommodated financial conditions, reducing the expectations of an increase in Boj’s interest rates at the end of this month. In addition, the greatest performance T of Friday weigh the Yen.
The losses in YEN were limited due to the highest yields of Japanese government bonds as the 10 -year -old JGB bonus rose to a maximum of 17 years on Friday at 1,675%. The short cover also gave a boost to Yen on Friday before Saturday’s elections for the next leader of the ruling democratic liberal party.
Japan’s unemployment rate increased +0.3 to a maximum of 13 months of 2.6%, showing a weaker labor market than 2.4%expectations.
The PMI composed of Japan SEP S&P was reviewed up to +0.2 to 51.3 of the 51.1 previously reported.
December’s gold (GCZ25) on Friday closed +40.80 ( +1.05%), and December silver (SIZ25) closed +1.593 ( +3.45%). The prices of precious metals were abruptly recovered on Friday, with Silver Dec publishing a high and closer contract (V25) Silver publishing a maximum of 14 years. Friday’s weakest dollar was optimistic for the metal market. In addition, Friday’s closure of the United States government for the third day increased the safe demand for precious metals. Precious metals continue to receive safe support due to uncertainty linked to American tariffs, geopolitical risks and global commercial tensions. In addition, President Trump’s attacks against Fed Independence are increasing the demand for gold, since he tries to say goodbye to Fed Cook governor. In addition, Stephen’s intention looks at being a governor of the Fed, while technically has his work of the White House in the Council of Economic Advisors contributes to this uncertainty.
On Wednesday, the closest gold prices (V25) increased to a record of $ 3.891.90 per Troy ounce. The recent weakest US economic news has reinforced the prospects for Fed to continue reducing interest rates, a bullish factor for precious metals. The Swaps market shows 97% possibilities for the FED to reduce the range of federal fund objectives in 25 BP at the FOMC meeting from October 28 to 29.
The prices of precious metals continue to receive support for the purchase of ETF funds of precious metals. Gold holdings in ETFs rose to a maximum of 3 years on Thursday, and Silver Holdings in ETFs rose to a maximum of 3 years on Wednesday.
On the date of publication, Rich Asplund had no positions (directly or indirectly) in any of the values ​​mentioned in this article. All information and data in this article are only for informative purposes. This article was originally published at Barchart.com
