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MTrading Team • 2022-10-06

US dollar fades recovery amid sluggish markets

US dollar fades recovery amid sluggish markets

Global markets remain in dilemma but neither the uncertainty nor upbeat US data help the US dollar to keep its rebound from the weekly low. The reason could be linked to the market’s anxiety ahead of Friday’s US jobs report.

NZDUSD managed to lead the gainers versus the USD while the USDJPY occupied the other end amid firmer US Treasury yields. Prices of gold also cheered the greenback’s weakness but oil retreated from a three-week high.

Cryptocurrencies fear harsh regulations and hesitate in extending the run-up while equities remain mixed.

Following are the latest moves of the key assets:

  • Brent oil retreats from three-week high, down 0.25% intraday around $92.85 at the latest.
  • Gold regains upside momentum as buyers poke $1,725, up 0.30% by the press time.
  • USD Index remains pressured around 111.00 while losing 0.20% on a day as we write.
  • FTSE gains 0.20% on a day but Eurostoxx and DAX are both up more than 1.0% by the press time.
  • Wall Street closed with mild losses led by Nasdaq’s 0.25% downside.
  • BTCUSD remains mildly bid around $20,200 whereas ETHUSD gains 1.0% as buyers flirt with the $1,370.
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Market’s indecision weighs on the greenback

The US dollar remains on the way to posting the second weekly loss as traders fear that the Fed hawks are running out of steam amid global recession fears. Also challenging the greenback buyers could be the recently mixed US data.

In doing so, the US currency failed to benefit from Russia versus the West tension, as well as fears of economic recession.

The same seemed to have favored gold to reverse the latest losses due to its traditional haven status.

NZDUSD, on the other hand, benefits from the wider difference between the monetary policies of the RBNZ and the Fed. Recently, New Zealand’s Deputy Prime Minister and Finance Minister Grant Robertson conveyed his cautious optimism and offered additional strength to the pair.

WTI crude oil eases from the three-week high, snapping a three-day uptrend, as the US braces to challenge the OPEC+ leaders for their decision of cutting output and fueling prices.

Furthermore, BTCUSD and ETHUSD struggle to remain firmer as policy fears battle the whales’ positioning strategies.

⏫ 🟢 Strong buy: USDJPY

⏬ 🔴 Strong sell: ETHUSD

⬆️ 🟢 Buy: USD Index, USDCAD, Nasdaq, EURUSD

⬇️ 🔴 Sell: DAX, FTSE 100, gold, BTCUSD, AUDUSD

Second-tier EU data and policymakers’ speeches are important

While the market sentiment is likely to remain sluggish ahead of Friday’s US Nonfarm Payrolls (NFP), today’s EU Retail Sales and a speech from BOC Governor Tiff Macklem could entertain traders. Also important will be the public appearances of the Fed policymakers.

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