The US Dollar (USD) strengthened to multi-day highs on Monday, driven largely by a sharp decline in the Japanese Yen (JPY). Meanwhile, investors kept a close eye on developments surrounding the ongoing US government shutdown, though little progress was reported toward a potential resolution.
What to watch on Tuesday, October 7
The US Dollar Index (DXY) extended its upward momentum, climbing toward 98.50 as Treasury yields advanced and the lack of fresh headlines on the shutdown kept the greenback well supported. On the data front, traders will monitor the RCM/TIPP Economic Optimism Index, the New York Fed’s Consumer Inflation Expectations, and the American Petroleum Institute’s (API) weekly report on US crude oil inventories. Additionally, several Federal Reserve (Fed) officials—including Bostic, Bowman, Miran, and Kashkari—are scheduled to speak, which could offer fresh policy signals.
Euro dips, Pound holds firm
EUR/USD slipped to multi-day lows around 1.1650, where some buying interest emerged. Germany’s Factory Orders data will be released later today, followed by remarks from European Central Bank (ECB) President Christine Lagarde.
GBP/USD managed to recover from early weakness, building on Friday’s gains to challenge the 1.3500 level. In the UK, the Halifax House Price Index and BBA Mortgage Rate are due for release.
Yen slides, Aussie extends recovery
USD/JPY surged to new two-month highs near 150.50 amid persistent Yen weakness. Japan’s Household Spending data, along with preliminary readings for the Coincident and Leading Economic Indices, are due later in the session.
AUD/USD continued its two-day rebound, climbing above the 0.6600 mark. The Westpac Consumer Confidence Index will be the main focus in Australia.
Commodities gain as sentiment firms
WTI crude oil prices rebounded to two-day highs above $62.00 per barrel after OPEC+ announced a smaller-than-expected output increase over the weekend.
Gold extended its rally to a new all-time high near $3,960 per troy ounce, buoyed by steady safe-haven demand, ongoing shutdown concerns, and growing expectations of Fed rate cuts. Silver followed suit, breaking above $48.00 per ounce for the first time since April 2011.
