U.S. Dollar (DXY) Is Swinging Between Gains And Losses After Yesterday’s Sell-Off

Key Insights

• GBP/USD is trying to stabilize near the 1.1300 level. 
• NZD/USD received support as New Zealand inflation exceeded expectations. 
• USD/JPY touched new highs above the 149 level. 

U.S. Dollar Index Tested Support At 112

U.S. Dollar Index has settled near the 112  level as the appetite for risk is growing.

Today, traders had a chance to take a look at the Industrial Production and Manufacturing Production reports from the U.S. Industrial Production increased by 0.4% month-over-month in September, compared to analyst consensus of 0.1%. Manufacturing Production has also grown by 0.4% on a month-over-month basis.

The yield of 10-year Treasuries has moved below the 4.00% level, which was bearish for the American currency. In case Treasury yields move further away from yearly highs, the U.S. dollar will find itself under more pressure.

EUR/USD Gained Some Ground As Euro Area Economic Sentiment Improved

EUR/USD managed to get above the 0.9850 level after the Euro Area ZEW Economic Sentiment Index report indicated that Economic Sentiment improved from -60.7 in September to -59.7 in October. Analysts expected that it would decline to -61.2.

The situation in the Eurozone remains tense ahead of the winter. While the European natural gas prices have declined by more than 60% from their August highs, current price levels continue to put pressure on European businesses. The situation may get worse when winter begins, so it remains to be seen whether EUR/USD bulls will find enough catalysts for a sustainable rebound in the upcoming weeks.

GBP/USD Is Trading Near 1.1300

GBP/USD is currently trying to stabilize near the 1.1300 level. While GBP/USD bulls are happy that the UK reversed its spending plans, political uncertainty continues to put some pressure on the pound.

Tomorrow, the UK will release inflation reports, which are expected to show that Inflation Rate increased from 9.9% in August to 10% in September. Trading in GBP/USD may stay choppy ahead of this important report.

NZD/USD Moves Higher As Inflation Exceeds Expectations

NZD/USD made an attempt to settle above the 0.5700 level after New Zealand Inflation Rate report indicated that Inflation Rate declined from 7.3% in the second quarter to 7.2% in the third quarter, compared to analyst consensus of 6.6%. Inflation remains a serious problem and traders expect additional moves from the country’s central bank.

Meanwhile, AUD/USD tested resistance at 0.6340 but lost momentum and pulled back towards the 0.6300 level. USD/CAD moved towards 1.3750 after an unsuccessful attempt to settle below 1.3660.

USD/JPY Managed To Get Above 149

USD/JPY tests new highs above the 149 level as there are no signs of interventions from the BoJ.

The monthly chart indicates that USD/JPY is trading at levels that were last seen back in 1990. USD/JPY is extremely overbought, but the dovish policy of the BoJ will continue to put significant pressure on the Japanese yen.

For a look at all of today’s economic events, check out our economic calendar.