Concerns Mount Over Whether the U.S. Dollar, Weakened by Economic Indicators, Will Fall Further Toward the End of the Week

Concerns Mount Over Whether the U.S. Dollar, Weakened by Economic Indicators, Will Fall Further Toward the End of the Week

05.10.2023

In the U.S. currency market yesterday, the U.S. dollar temporarily fell against the yen after the September ADP employment report, released yesterday, showed a significant downward revision from the previous month’s 177,000 to 89,000.USD/JPY traded in a narrow range between 149.312 and 148.734, with the 20-period moving average on the hourly chart consistently capping gains throughout the session. On the 4-hour chart, the pair is barely finding support at the 75-period moving average, so traders should remain cautious regarding comments from key officials during U.S. trading hours.

European currencies fell, with the euro dropping against the pound after the European Union’s August Producer Price Index (PPI), released yesterday, worsened from -7.6% to -11.5% year-over-year.The euro-pound pair fell from 0.8682 to 0.8639, briefly dipping below the 75-period moving average (MA) on the 4-hour chart. However, on the higher-timeframe daily chart, the pair continues to find support at the 20-period MA, so traders should keep an eye on currency strength and weakness during European trading hours.

Today’s schedule includes Germany’s trade balance at 3:00 p.m., France’s industrial production at 3:45 p.m., Taiwan’s consumer price index at 5:00 p.m., the UK’s construction PMI at 5:30 p.m.,at 6:45 PM, remarks by UK BOE Deputy Governor Broadbent; at 8:30 PM, U.S. Challenger layoff announcements; at 9:00 PM, Mexico’s Consumer Confidence Index; at 9:30 PM, U.S. initial jobless claims, Canada’s International Merchandise Trade, and U.S. trade balance;at 22:00, remarks by Nagel, President of the German Bundesbank, and remarks by Mester, President of the Cleveland Fed; at 23:00, the Canadian Ivey Purchasing Managers’ Index; at 23:40, remarks by Kashkari,Remarks by Kashkari, President of the Federal Reserve Bank of Minneapolis; and at 25:15, remarks by Bar, Vice Chair of the Federal Reserve. We will watch the situation closely to see if the U.S. dollar, which has weakened due to economic indicators, will continue to decline toward the end of the week.