Forex Today: US Dollar clings to bullish stance ahead of mid-tier data releases
Here is what you need to know on Tuesday, October 6:
Tuesday, October 6 saw the US Dollar (USD) maintaining its bullish stance as the session commenced. The USD Index remained in positive territory after modest gains on Monday. Eurostat is scheduled to release Eurozone Retail Sales data for August in the afternoon. In the American session, trade balance data from Canada and the US will be featured. Investors will continue to monitor remarks from European Central Bank (ECB) and Federal Reserve (Fed) policymakers later in the day.
The US Dollar has been the strongest against the Euro this week. The heat map displays percentage changes of major currencies against each other, with USD showing the highest gain versus the Euro. The benchmark 10-year US Treasury bond yield has edged higher on Monday, supporting the USD. However, a slight improvement in risk mood and positive action in Wall Street indexes limited the USD's upside.
President Donald Trump signed an executive order to ease restrictions on tax-exempt diesel use. The measure aims to "officially waive the off-road requirement and allow anyone to purchase tax-free, red-dyed diesel for any reason." Meanwhile, crude Oil prices continue to ease, with West Texas Intermediate (WTI) trading below $88 early Tuesday, down nearly 1% on the day.
EUR/USD closed negatively on Monday due to uncertainty surrounding France's fiscal outlook, causing doubts about the ECB's ability to tighten policy. EUR/USD struggled to rebound, trading slightly above 1.1200 in the European morning. Earlier, German Factory Orders declined by 10.6% in August, missing market expectations. Analysts at ING noted that "risks are firmly on the downside for EUR/USD" due to a lack of fiscal premium and unwinding of ECB rate hike expectations from French bond turbulence. EUR/USD could test 1.110 or even 1.100 if bond market stress intensifies.
The Japanese economy is recovering moderately, according to Bank of Japan (BoJ) Governor Kazuo Ueda. Inflation is approaching 2%. USD/JPY remains relatively quiet above 158.00 in the European morning. GBP/USD is steady around 1.3200 in the European session, declining on Monday but limiting losses as the British Pound captured capital outflows from the Euro.
Gold (XAU/USD) closed flat on Monday, edging lower toward $4,100 early Tuesday. ING stated that further upside for gold could be constrained by elevated Treasury yields, persistent inflation concerns, and a firmer US dollar.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
