Bullet Report: Dollar Index at 8-month High, FED More Likely to Raise Rates

Last week saw two Central Banks (ECB & BoC) cause a lot of volatility and cause the drop of EUR and CAD respectively. With no major headlines expected this week the markets will focus on the next FED meeting on November 2nd and the US Elections on November 8th. Last week’s main theme was the resurgence of the USD as the dominant currency. The Dollar Index made new 8- month highs versus many of its counterparts across the globe. Interest rates futures imply about a 70%chance that the Fed will hike interest rates in December.

Currencies: Today the EUR/USD is trading at 1.0870 almost unchanged from Friday’s close which saw it drop to levels not seen since March. The pair is now open to a drop of 1.08 and possibly 1.0710 before the end of the year. GBP/USD is yet again under pressure, but after hitting a low of 1.2171 on Friday the pair managed to recover over 1.2200, however the downward trend is still intact. The dollar was also supported by hawkish comments from Fed officials including New York Fed President William Dudley and higher expectations that Hillary Clinton will win the U.S. presidential election, which have increased bets that the Fed will raise rates in December.

Stocks: Asian stocks closed higher today although in a marginal fashion. The Nikkei edged up 0.11%, while shanghai rose 1.21%. The S&P 200 dipped 0.69%. US stocks were mixed after the close on Friday. At the close in NYSE, the Dow Jones fell 0.09%, while the S&P 500 index declined 0.01%, and the NASDAQ added 0.30%.

Oil and Gold: After reaching a 15-month high last week, Crude oil prices have backtracked to $50.50 this morning, as investors have taken profits, slowing down Crude oils rally. Last week, oil futures reversed early losses to end higher on Friday, despite a stronger dollar after Russia’s energy minister said an oil output freeze agreement was necessary to help stabilize the market. GOLD prices are still stable at $1265 as investors are in a wait and see mode in relation to the direction of interest rates. When US interest rates rise, Gold tends to drop as it is a non interest yielding asset.

The post Bullet Report: Dollar Index at 8-month High, FED More Likely to Raise Rates appeared first on Forex.Info.

Source:: Bullet Report: Dollar Index at 8-month High, FED More Likely to Raise Rates