Dollar Soars on Risk-off Mood

Dollar

The dollar index, which measures the greenback against a basket of other major currencies, soared to a six-week high of 93.88 supported by the ongoing risk-mood. Investors rushed to dollar safety amid growing woes over the resurgence of covid19 and its possible impact on the economic recovery around the world, especially after a sharp increase in cases in the European currencies. Market participants are looking forward to Powell's testimony later today, to have some insight on the tools that the Federal Reserve could use to protect the ongoing recovery. The EURUSD tumbled to a six-week low of $1.1721, the GBPUSD crashed to a two-month low of $1.2732, and the risk-sensitive AUDUSD fell to a four-week low of $0.7138.

Equities

Major US stock-index futures resumed declines during the Asian session following a sharp rebound ahead of US close. Stock benchmarks were under pressure due to the dim outlook over the economic recovery, especially after the recent increase in Covid19 cases around the world. On the other hand, the low-possibilities of reaching a new fiscal stimulus package ahead of the US presidential elections weighed on risk appetite. The Dow Jones Industrial Average futures fell to 23901, the S&P500 dropped to 3296, and Nasdaq futures eased to 10896.

Metals

Precious metal prices tumbled sharply as the dollar rallied. The price of a gold ounce plunged to a six-week low of $1882 but managed to recover to above $1900 heading into the European open. The price of a silver ounce dropped significantly to $23.69, and palladium futures descended to $2250.

Oil

Oil prices were battered by the risk-off sentiment amid mounting concerns over the economic recovery, which would weigh on oil-demand levels if disrupted. The West Texas Intermediate crude November delivery fell to $38.86, and Brent Blend November delivery declined to $41.00

Major Economic Events

Disclaimer

The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM.COM. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.