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Forex Market Continues Slightly Lower




  • US Dollar Index Stays Quiet
  • Jobs & PMIs in Focus
  • Futures Down After Strong Stock Rally

The US Dollar forex market has not had too many down days in recent months. Moving into the middle of this week, however, the market remains subdued. The US Dollar Index which has traded at new high after high,  is down today around the 110.00 mark. This comes as traders begin to shift focus to the latest employment reports coming from the US and the services PMIs to come. These will be good indicators moving forward. Meanwhile, on Wall Street, the stock market is taking a breather following its two-day positive run to begin the week.

Dollar Index Slightly Lower on Cautious Mood

The US Dollar Index, a measure of the currencies strength against a basket of other major currencies, has dipped to start the week and now sits at around 110.00. While this is still a high point from a historical perspective, it is a move lower than the index has been in recent weeks. The move in part may have been brought about by a more upbeat Euro with the common currency bouncing higher toward parity against the Dollar today.

The Euro and its move back toward parity could represent some light in what has been a very dark period for the pair with historic new lows against the Dollar. The news that Russia is to resume some gas supply to Europe has preempted the move higher by the currency in a climate dominated by geopolitical concern in the region and an ongoing energy crisis. 

US Employment and PMIs in View

A number of factors have led those forex trading the Dollar to adopt a more open stance in the early part of this week. Not least of these a more positive market mood has provided some opportunity to invest away from the traditional safe haven Dollar that has garnered so much safe money over this period. 

Caution remains though as traders switch focus to the employment numbers in the US for this week. These are always looked at with some caution by the market as investors bide their time to decide how the latest figures are likely to move the market and any kind of decisions from policymakers. Both these pieces of data will be used by traders to form a view on the likely approach of the Fed when it comes to a November rate hike.

Wall Street Slow After Rally

The previous two days have brought solid gains for all the major indices on Wall Street amid a more positive market mood. This kind of sentiment has been in short supply recently as fear of inflation and recession took center stage. During regular trading on Tuesday, all three major indices gained close to or above 3%. 

This positive momentum has long been lacking but has also dropped off slightly heading into Wednesday as forex brokers and stock brokers alike deal with traders taking a step back in anticipation of data to come this week which could prove pivotal.

Anthony is a financial journalist and business advisor with several years’ experience writing for some of the most well-known sites in the Forex world. A keen trader turned industry writer, he is currently based in Shanghai with a finger on the pulse of Asia’s biggest markets.