Here’s what you need to know on Friday, October 10:
US Dollar (USD) There was a move back after a four-day rally as the market awaits preliminary consumer sentiment index data from the University of Michigan (UoM) for October. Later in the day, Statistics Canada will publish employment data for September.
US dollar price this week
The table below shows the percentage change of the US Dollar (USD) against the major currencies listed this week. The US dollar was the strongest against the Japanese yen.
| USD | EUR | gbp | JPY | scurvy | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 1.17% | 1.03% | 2.18% | 0.44% | 0.35% | 1.09% | 1.13% | |
| EUR | -1.17% | -0.24% | 0.94% | -0.76% | -0.84% | -0.13% | -0.07% | |
| gbp | -1.03% | 0.24% | 1.26% | -0.52% | -0.60% | 0.12% | 0.17% | |
| JPY | -2.18% | -0.94% | -1.26% | -1.67% | -1.85% | -1.16% | -1.08% | |
| scurvy | -0.44% | 0.76% | 0.52% | 1.67% | -0.05% | 0.64% | 0.69% | |
| AUD | -0.35% | 0.84% | 0.60% | 1.85% | 0.05% | 0.72% | 0.78% | |
| NZD | -1.09% | 0.13% | -0.12% | 1.16% | -0.64% | -0.72% | 0.05% | |
| CHF | -1.13% | 0.07% | -0.17% | 1.08% | -0.69% | -0.78% | -0.05% |
The heat map shows the percentage change of major currencies against each other. The base currency is selected from the left column, while the quote currency is selected from the top row. For example, if you select US Dollar from the left column and move to Japanese Yen along the horizontal line, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Democrats and Republicans failed to make any progress on reopening the government after the funding bill was once again rejected by a 54-45 vote. The Senate returns Tuesday and there will be no further votes on the bill until then. Meanwhile, The New York Times reported earlier in the day that the US Bureau of Labor Statistics (BLS) is recalling a limited number of workers from furlough to complete the September Consumer Price Index (CPI) report. Still, it is unclear whether inflation data will be released on October 15 as originally scheduled. The USD index remained below 99.50 in the European morning on Friday, after rising more than 0.5% on Thursday, while US stock index futures traded marginally higher.
The unemployment rate in Canada is projected to increase from 7.1% in August to 7.2% in September. USD/CAD The stock was steady around 1.4000 in the European morning on Friday after hitting its highest level above 1.4030 earlier in the day since April.
USD/JPY It remained steady at around 153.00 early Friday and is up more than 3.5% since the beginning of the week. Growing concerns over the political crisis in Japan do not allow the Japanese Yen to make a decisive counterattack. Komeito Party leader Tetsuo Saito on Friday said he cannot agree with Japan’s ruling Liberal Democratic Party (LDP) on issues related to money and politics, adding that he wants to reset the LDP-Komeito ruling coalition for the time being.
EUR/USD It fell more than 0.5% on Thursday and closed in negative territory for the fourth consecutive day. The pair recovered early on Friday but remained below 1.1600.
GBP/USD It settled near 1.3300 in the European session on Friday after falling about 0.75% on Thursday.
Easing of geopolitical tensions in the Middle East led to profound improvement Sleep On Thursday. After losing 1.6% and closing below $4,000, XAU/USD struggled to gain recovery momentum and fluctuated in a tight range above $3,980.
Reserve Bank of Australia (RBA) Governor Bullock said on Friday that services inflation remains “a bit sticky” and said the labor market is close to equilibrium despite some tightening. After Thursday’s 0.5% loss, AUD/USD That’s linked to small daily gains above 0.6560 in the European morning on Friday.
US Dollar FAQ
The US dollar (USD) is the official currency of the United States, and the ‘de facto’ currency of many other countries where it is found in circulation along with local notes. According to 2022 data, it is the most traded currency in the world, accounting for more than 88% of all global foreign exchange turnover or an average of $6.6 trillion transactions per day. After the Second World War, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US dollar was backed by gold, until the Bretton Woods Agreement in 1971 when the gold standard ended.
The most important factor influencing the value of the US dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and to promote full employment. Its primary tool to achieve these two goals is to adjust interest rates. When prices are rising too fast and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the unemployment rate is very high, the Fed may lower interest rates, which has an impact on the greenback.
In extreme situations, the Federal Reserve may even print more dollars and implement quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit into a stuck financial system. This is a non-standard policy measure used when credit is lost because banks will not lend to each other (for fear of counterparty default). It is a last resort when simply reducing interest rates is not likely to achieve the required results. It was the Fed’s preferred weapon to deal with the credit crunch that arose during the great financial crisis in 2008. This involves the Fed printing more dollars and using them to buy US government bonds, primarily from financial institutions. QE usually leads to a weakening of the US dollar.
Quantitative tightening (QT) is a reverse process whereby the Federal Reserve stops purchasing bonds from financial institutions and does not reinvest the principal from maturing bonds in new purchases. This is generally positive for the US dollar.
