Will the U.S. dollar, which has weakened due to economic indicators, continue to fall toward the end of the week?

Will the U.S. dollar, which has weakened due to economic indicators, continue to fall 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 following the release of the September ADP employment report, which showed a significant downward revision from 177,000 in the previous month to 89,000. The USD/JPY pair traded in a narrow range between 149.312 and 148.734, with the 20-period moving average on the hourly chart consistently capping gains.On the 4-hour chart, the pair is barely finding support at the 75-period moving average, so we should remain cautious regarding comments from key officials during U.S. trading hours.

European currencies fell, with the euro dropping against the pound after yesterday’s release of the Eurozone’s August Producer Price Index (PPI) showed a deterioration from -7.6% to -11.5% year-on-year.The EUR/GBP 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 pay close attention to currency strength during European trading hours.

Today’s schedule includes Germany’s trade balance at 3:00 PM, France’s industrial production at 3:45 PM, Taiwan’s consumer price index at 5:00 PM, and the UK’sConstruction PMI, at 6:45 PM UK Deputy Governor Broadbent’s remarks, at 8:30 PM US Challenger Job Cuts, at 9:00 PM Mexico Consumer Confidence Index, at 9:30 PM US Initial Jobless Claims, Canada International Merchandise Trade, US Trade Balance,22:00: Remarks by Nagel, President of the German Bundesbank, and Mester, President of the Cleveland Fed; 23:00: Canada’s Ivey Purchasing Managers’ Index; 23:40: Remarks by Kashkari, President of the Minneapolis Fed; and 25:15: Remarks by Barr, Vice Chair of the Federal Reserve.We will closely monitor whether the US dollar, which has weakened due to economic indicators, will continue to decline into the latter half of the week.