After a short lived comeback yesterday, the USD resumes its decline trading at a two week low against the euro, ahead of key central bank meetings.
- The greenback is under pressure as signs the global economy is recovering, boosting demand for higher-yielding assets. The USD fell against most of its major counterparts as Asian stocks rally ahead of a German report forecasted to show industrial output rose for a second month and Japan's machine orders climbed in August.
- The Australian dollar rose 1.2% to 90.20 US cents, the highest level since August 2008, from 89.12 in New York yesterday. The number of people employed rose 40,600 last month from August 2008 according to the statistics bureau in Sydney against expectation of a 10,000 decline in jobs. The jobless fell to a better-than-expected seasonally adjusted 5.7% in September from 5.8% the previous month.
- Alcoa Inc., the largest US aluminum producer, cut jobs and raw-material costs faster than analysts projected in the third quarter, producing a profit when most had estimated a net loss. Alcoa posted profit of 4 cents a share and the company's sales, which dropped 34% from the previous year, also beat analysts' forecasts.
- The ECB will hold its main refinancing rate a record low of 1%, and the Bank of England will keep its main rate at an all-time low of 0.5%, according to market estimates. Both central banks meet today. Investors will be closely watching the wording of any accompanying remarks.
- Crude oil collapsed to 68.90 after a two day rally as petroleum product inventories increased more than expected. Today in Asia, energy prices rebound as the dollar weakens. Crude oil recovers almost $1.5 to $70.36. Gold continued its rally, despite a comeback in USD yesterday, breaking above the $1050 making a new record for a third day at $1054.23.
Currency to watch out for: EURUSD & GBPUSD
- The EURUSD pivot point is at 1.4700 with a preference to enter into long positions at 1.4710
- The GBPUSD pivot point is at 1.5925 with a preference to enter into long positions at 1.5935
Today's calendar and market movers:
- German Industrial Production expected to rise to 1.6%
- UK Official Bank Rate expected to remain at 0.5%
- ECB Minimum Bid Rate expected to remain at 1.0%
- US Unemployment Claims expected to drop to 540,000
- US equities were mixed on Wednesday with the Dow lower 0.1% the S&P and the NASDAQ up 0.3%.
- As of 06:15 GMT the Nikkei is trading at 0.34% and the Hang Seng at 0.39%.