Summary:
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USD near 2018 peak as consumer confidence rises to 18 year high
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GBPUSD falls below $1.28
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US stocks look to recover from recent rout
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Brazilian stocks higher as markets digest election results
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3 charts to watch: USDPLN, KOSP200, Oil
It’s looking like another day of solid gains for the US dollar, with the buck rising against most of its peers. After falling to the low 93s back in mid-September a trade weighted index of the US dollar has been in a steady grind higher, with the market now closing in on its 2018 peak set back in August. This afternoon the only data of note for the USD was the Conference Board consumer confidence figure which surprised to the upside in printing its highest reading since 2000. The number of 137.9 was comfortably above the 135.9 expected, but it should be noted that this was only a 18-year high because the prior reading of 138.4 was revised lower to 135.3. Another consideration which should be made is that while this data is for the month of October, the survey was concluded by the 18th and therefore was before a large chunk of the selling seen in the stock market.
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Open account Try demo Download mobile app Download mobile appThere’s been further downside seen in the pound today with the currency falling below $1.28 to trade at levels not seen since mid-August. The declines in cable are due in part to a strengthening US dollar, with a trade weighted index of the buck hitting its highest level of the year this morning, but mainly it is down to sterling weakness, with the pound lower on the day against all its major peers other than the Japanese Yen.
Monday’s session saw some strong declines for US indices with a bright start fading out and the US500 dropping to its lowest level since early May. However, there was a large bounce into the closing bell, which meant the market ended comfortably off the lows and this could be seen as a positive sign going forward. As of yesterday’s close the S&P500 (US500) had fallen nearly 10% for the month of October, meaning should price end tomorrow around these levels then the declines would be the 10th largest monthly losses on record. The US500 showed a large hammer on H1 into last night’s close which could be taken as a positive sign going forward. The top of the H1 cloud is currently around 2675 and if the market can get back above there today then the short term trend could be seen to have turned upwards.
As far as stocks indices are concerned the biggest swings are seen in Brazil where BRAComp is up 2.7% today. This marks only a partial recovery of yesterday’s slump from the highest opening of the decade after it was confirmed that Jair Bolsonaro would become the president. Meanwhile MEXComp is down 0.5% as investors are concerned about implication of cancellation of the huge airport project.
Our top 3 charts this week focus on the USDPLN, KOSP200 and Oil and can be viewed here.
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