The financial market experienced a choppy, yet ultimately positive week as the US ended a record-long government shutdown. After 43 days, the spending bill finally passed, clearing the way for the resumption of official data.The Bureau of Labor Statistics quickly confirmed that the long-delayed September nonfarm payrolls report will be released on Thursday, November 20, giving traders a fresh anchor after weeks of trading in the dark. On the other hand, Fed officials, including Cleveland's Beth Hammack and ...

Market reaction to U.S. President Donald Trump's tariffs U-turn on more than 200 food products was muted, with some analysts saying the move was not a surprise due to cost-of- living issues. Elsewhere, sterling remained under pressure following a whirlwind Friday session as speculation swirled around the UK government's highly anticipated November 26 budget. The safe-haven Swiss franc hovered around a one-month high and last stood at 0.7941 per dollar, finding support from jitters over an ugly selloff in s ...

By Kevin Buckland and Amanda Cooper TOKYO/LONDON (Reuters) -The dollar eased on Thursday after U.S. President Donald Trump signed a deal to end the government shutdown, while the yen hit a record low against the euro after Japan's new prime ​minister said she wanted the central bank to go slow on rate hikes. The pound briefly touched a session low, before recovering, after a report ‌showed the UK economy barely grew in the third quarter of the year. The Australian dollar, meanwhile, hit a two-week high ...

Market Sentiment - Risk-off sentiment has been pervasive across markets, leading to a stronger USD against most currencies, with the exception of JPY [1][9] - The Australian dollar and New Zealand dollar have been particularly weak, with the latter reaching a nearly seven-month low following a rise in the unemployment rate [9][10] Currency Performance - The U.S. dollar index was steady at 100.18, having reached as high as 100.25 for the first time since August 1 [5][10] - Sterling is near a seven-month low after UK finance minister Rachel Reeves hinted at broad tax rises in her upcoming budget [1][2] - The New Zealand dollar fell to $0.5635 after a 1.2% drop on Tuesday, marking a seven-month low [7][10] Stock Market Trends - Selling pressure dominated Asian stock markets, with Japan's Nikkei dropping 2.4% and South Korea's KOSPI plunging 4.8% [4][9] Economic Indicators - The ongoing government shutdown in the U.S. has halted the flow of macroeconomic data, increasing focus on private ADP payrolls [6][10] - The Reserve Bank of Australia's recent policy statement was not perceived as hawkish, contributing to the weakness of the Australian dollar [8][10] Cryptocurrency Market - Bitcoin experienced a 6.1% decline on Tuesday, reaching its lowest level since June 22, trading around $100,317 [8][10]

Economic Outlook - The Australian dollar rose by 0.3% to $0.6504, buoyed by positive economic data from China and a more optimistic trade outlook [1][4] - China's economy grew by 1.1% in Q3, surpassing forecasts, with industrial output increasing by 6.5%, although the annual growth rate of 4.8% was the weakest in a year [2][3] - Analysts suggest that China is on track to meet its growth target of around 5%, indicating resilience against U.S. tariffs [3] Political Developments - The yen weakened initially as Sanae Takaichi appeared set to become Japan's next prime minister, following crucial political backing [1] - Takaichi's bid for premiership was bolstered by an alliance with the Japan Innovation Party, aligning more closely with her policy views after a previous coalition breakup [5][6] - The market is reacting positively to the potential for Takaichi's leadership, leading to bullish equities and bearish sentiment towards the yen [5] Market Sentiment - Market analysts indicate a sense of "mutually assured destruction" regarding U.S.-China trade tensions, with both sides acknowledging the risks of escalating tariffs [4] - There is a prevailing sentiment that markets will remain jittery until explicit announcements of de-escalation are made [5]

Currency Market Dynamics - The U.S. dollar is experiencing a third consecutive daily loss against the euro while slightly increasing against the yen, influenced by U.S.-China tensions and dovish comments from Federal Reserve officials [1] - U.S. Treasury yields are near multi-week lows, with the benchmark 10-year yield just above 4%, contributing to pressure on the dollar amid concerns over a prolonged U.S. government shutdown [2][3] - The dollar index, which measures the greenback against six other currencies, decreased by 0.05% to 98.63, indicating a potential weekly decline of around 0.3% [3] Rare Earths and Trade Relations - Investors are closely monitoring China's recent expansion of rare earth export controls, which has drawn criticism from U.S. officials and raised concerns about potential disruptions to global supply chains [4] - The situation is viewed as possibly a bargaining tactic by China to gain concessions from the U.S., according to market analysts [4] Australian Dollar and Economic Indicators - The Australian dollar remained stable at $0.6511 following data that showed unemployment reached a near four-year high in September, reinforcing the case for interest rate cuts [6] - The Australian dollar has been volatile due to trade tensions, while traditional safe-haven assets have gained [6] - China's yuan strengthened to a two-week high against the U.S. dollar after the central bank set its strongest daily midpoint in a year [6]

Economic Outlook - Federal Reserve Chair Jerome Powell indicated a potential interest rate cut at the upcoming policy meeting on October 28-29, citing a stagnant labor market and the impact of the government shutdown on economic data assessment [6][8] - Markets are currently anticipating a quarter-point rate cut this month, another in December, and three additional cuts next year, according to LSEG data [6][8] Currency Movements - The U.S. dollar index was flat at 99.055 after a 0.2% decline in the previous session, with the dollar losing ground against the safe-haven yen and Swiss franc [2][8] - The greenback was steady at 151.80 yen, following a 0.3% slide, and little changed at 0.8013 franc after a similar drop [2][8] - The euro held firm at $1.1606 after gaining 0.3% in the previous session [3][8] U.S.-China Trade Tensions - Escalating tensions between the U.S. and China were highlighted, with both countries imposing fees on shipping firms, affecting various goods [7][8] - Joseph Capurso from Commonwealth Bank of Australia noted that the U.S.-China tensions could escalate further, which may negatively impact the risk-sensitive Australian dollar [7][8] - The Australian dollar edged up 0.1% to $0.6491 after a previous decline, while the New Zealand dollar eased 0.1% to $0.5706, extending its decline from Tuesday [7][8]

Core Insights - The US dollar has strengthened against most major currencies due to renewed trade tensions with China, prompting investors to seek safe-haven assets [2] - The Bloomberg Dollar Spot Index increased by 0.3%, reaching its highest level since August 1, as government bonds rallied and stock prices fell [2] - Analysts from ING suggest that the dollar's renewed status as a safe haven and additional bullish momentum could support its value in the near term [3] Currency Movements - The Australian dollar experienced a 1% decline, marking its lowest value in nearly two months, while the British pound reached a new two-month low following labor data from the UK [2] - Options markets indicate a rising demand for bullish dollar positions, particularly against the pound, Australian dollar, and Canadian dollar [4] - Conversely, traders are taking a bearish stance on the Japanese yen, which is currently leading G-10 currencies [4] Market Sentiment - Traders are closely monitoring a keynote speech by Federal Reserve Chair Jerome Powell for insights on whether the market's current pricing of the central bank's outlook is overly dovish [5]

Group 1 - The Australian dollar fell by 1% to 0.6465, marking its lowest level in nearly two months, while the New Zealand dollar decreased by 0.6% to $0.5693, reflecting a negative sentiment in risk assets due to U.S.-China trade tensions [4] - The U.S. and China are set to impose additional port fees on ocean shipping firms, impacting a wide range of goods, which indicates escalating trade tensions [3] - The chief economist at Lombard Odier highlighted that the ongoing trade war between the U.S. and China is a significant global concern, suggesting that uncertainty and tariffs will persist in the long term [5] Group 2 - Safe-haven currencies like the Swiss franc and Japanese yen strengthened, with the dollar down 0.3% against the yen and 0.1% against the franc, indicating a flight to safety amid geopolitical tensions [6] - Political uncertainty in Japan, particularly regarding the potential candidacy of Sanae Takaichi for prime minister, has limited the yen's gains, as her party's coalition partner withdrew support [6] - The euro experienced mixed trading, with Asian traders pushing it higher, while European traders saw it decline by 0.15% to $1.1552, reflecting uncertainty in the broader currency market [7]

Group 1 - The dollar declined after President Trump threatened to increase tariffs on China, raising concerns about the trade war's impact on the U.S. economy [1] - The dollar index fell by 0.4% to 98.99, but is still on track for a weekly gain of 1.66%, the largest since September 2024 [2] - The euro and yen strengthened against the dollar, while commodity-linked currencies like the Australian dollar weakened [2] Group 2 - Traders are monitoring the potential reopening of the U.S. federal government and upcoming economic data that could influence Federal Reserve policy [3] - The U.S. Bureau of Labor Statistics plans to release September's consumer inflation report on October 24, which is crucial for determining the cost-of-living adjustment for 2026 [3] - There is a 97% probability that the Federal Reserve will cut rates by 25 basis points at its October meeting, with a 92% chance of an additional cut in December [4] Group 3 - The Japanese yen weakened due to concerns that the Bank of Japan may not raise interest rates this year following a political shift [5] - Japanese Finance Minister expressed worries about excessive volatility in the foreign exchange market, indicating potential government intervention [6]