Forex: After three weeks of relative calm, the US dollar reported heavy losses against other leading currencies in the past five days. As lawmakers in Washington finally agreed on a budget deal and passed a draft bill to raise the debt ceiling hours before the deadline, which was later signed by President Barack Obama, the EUR/USD rose by 134 pips on Friday to 1.3683.
Although the quote stayed below the resistance zone at 1.3710, many analysts were quick to predict a gloomy near future for the greenback. The euro’s 8-month high against the US dollar further added fuel to the predictions.
Meanwhile, the GBP/USD touched down at 1.6164 on Friday night, or a 209-pip increase. The AUD/USD and NZD/USD also registered increases, with the Aussie reaching 0.9671, or a 203 rise, while the Kiwi closed at 0.8486, or 167 pips higher than the previous week.
Indices
The S&P500 ended the week with a new record-high as US Congress avoided the country’s possible default in the last minute. However, buyers got active not after the green light was given for the debt ceiling but after the new portion of US earnings season results. Google Inc. quarterly statements surpassed even the most positive forecast as the Internet search giant‘s net income increased 36% YoY to $2.97 billion. The S&P500 reported an increase by 2.39%, reaching the record high of 1,744 points. The technological Nasdaq100 appreciated by 3.70%, closing at 3,354 points on Friday, while the Dow added 0.99% to its value, registering a price of 15,392 on Friday.
European markets were also coloured in green, with all major indices reporting increases ranging from 1.30% to 3.40%. Many analysts indicated that the main reasons for the rise were not the news from the US but the positive Chinese GDP data. The National Statistics Office of China reported that the GDP has grown by 7.8% YoY.
Commodities
Last week was profitable for traders with long positions on gold and silver. Gold (XAUUSD) rose 3.50% and closed at $1,314 per troy ounce, while silver (XAGUSD) added 2.80% to its value in the last five days, which led to a Friday close at $21.89 per troy ounce.
What to expect this week?
This week has also got some interesting events to offer, with Monday’s highlight being the Existing Home Sales for September in the US. Tuesday will see the release of the delayed US Non-farm Payrolls for September along with the country’s unemployment data. Wednesday is also ‘action-packed’, starting with Australia’s Consumer Price Index (YoY and QoQ), the Bank of England meeting minutes, as well as the country’s Mortgage Approvals for September; moving to the US Import and Export Prices (YoY and MoM) and Housing Price Index for August and then closing the day with New Zealand’s Trade Balance for September.
Thursday’s main entries will be the preliminary release of the Markit Manufacturing and Services PMI for October of France, Germany and the Eurozone. Other data will include the US Initial Jobless Claims, Bank of England’s Governor Carney speech and Japan’s National Consumer Price Index for September (YoY). Friday’s highlights will be the European Council Meeting, Preliminary release of the UK’s GDP for Q3, and the US Durable Goods Orders.
Outside the economic calendar, the US earnings season will remain the main focus of investors as more than 30% of the companies in the S&P500 and 10 companies from the Dow will publish their results for Q3. Among some of the firms are McDonald’s Corp., Netflix Inc., SAP AG, and VMware Inc. on Monday, Daewoo International Corp. and Novartis AG on Tuesday, Boeing Co. and GlaxoSmithKline PLC on Wednesday. and Daimler AG on Thursday.
Source: dfmarkets.co.uk
Further reading: Debt deal deals blow to QE tapering – USD in a world of pain