Dollar Index Hits 1-Week High as European Currencies Tumble

USD

The dollar index, which measures the greenback against a basket of major currencies, rallied to a one-week high of 97.78 as European currencies tumbled. The Euro and Pound account for almost 70% of DXY's basket. The ongoing Brexit confusion and the rising chances of going for a general election drove the pound lower, supporting the shift to the dollar. On the other hand, the European Central Bank concluded its monetary policy meeting by leaving the monetary policy unchanged. In his last press conference as ECB president, Mario Draghi stated that the downside risks to the economic outlook are still prominent, and inflation remains muted. In the previous meeting, the ECB announced the resumption of asset purchases on November 1st to reach the designated economic figures. Market participants are now looking forward to the EU's Brexit deadline extension and the Federal Open Market Committee meeting next week. The US 10-year yields settled at 1.76%, the EURUSD dipped to a one-week low of $1.1093, and the GBPUSD plunged to $1.2788.

Metals

Gold prices soared as focus shifted to the Federal Reserve monetary policy meeting next week. The recently released US economic data raised the chances of an interest rate cut to 93.5% as per the CME Fed Watch Tool. The price of a gold ounce rallied to a two-week high of $1506, the price of a silver ounce edged higher to $18.03, and palladium climbed to $ 1783, three dollars short from posting a new record high.

Oil

Oil benchmarks locked previous gains supported prospects of additional supply cuts by OPEC+ and a drop in US inventories. The Organization of Petroleum Exporting Countries officials stated earlier that further supply cuts could be implemented to offset soft demand for oil. On the other hand, the US Energy Information Administration reported earlier this week a drop in US crude oil inventories. The West Texas Intermediate crude futures settled at $56.05, and Brent futures finished at $61.88.

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