U.S. Dollar Advances Ahead Of Fed Meeting
November 05 2018 - 3:59AM
RTTF2
The U.S. dollar drifted higher against its major counterparts in
the European session on Monday, as investors await key risk events
due this week, including U.S. mid-term elections and the Fed
meeting for directional cues.
The Federal Reserve kicks off its two-day meeting on Wednesday,
with economists anticipating interest rates to remain
unchanged.
Investors focus on the accompanying statement for clues about
the anticipated rate hike next month.
U.S. mid-term elections due on Tuesday would help decide whether
Democrats take control of the House of Representatives. Republicans
are likely to retain control of the Senate.
Investors doubt that a hung Congress could deter Trump's ability
for smooth passage of legislation.
The ISM non-manufacturing composite index for October is due at
10:00 am ET. The consensus is for 59.4, down from 61.6 in the prior
month.
The currency traded mixed against its major counterparts in the
Asian session. While it rose against the franc and the yen, it held
steady against the euro. Against the pound, it weakened.
The greenback climbed to a 4-day high of 1.0069 against the
franc, from a low of 1.0024 hit at 6:45 pm ET. The greenback is
seen finding resistance around the 1.02 region.
Having dropped to 1.1400 against the euro at 6:45 pm ET, the
greenback reversed direction and advanced to 1.1355. If the
greenback rises further, 1.12 is possibly seen as its next
resistance level.
Survey data from Sentix showed that Eurozone's investor
sentiment eroded for a third consecutive month in November to its
lowest level in two years.
The Sentix investor confidence indicator dropped to 8.8 from
11.4 in October. The latest reading, which matched economists'
expectations, was the lowest since October 2016.
The greenback hovered at a 5-day high of 113.34 against the yen,
reversing from a low of 113.11 touched at 7:00 pm ET. The greenback
is poised to challenge resistance around the 115.00 region.
The latest survey from Nikkei showed that Japan services sector
activity continued to expand in October, and at a faster rate, with
a PMI score of 52.4.
That's up from 50.2 in September, and it moves back above the
boom-or-bust line of 50 that separates expansion from
contraction.
The greenback reversed from an early low of 1.3027 against the
pound, rising to 1.2964. The greenback is likely to find resistance
around the 1.28 level.
Survey results from IHS Markit and Chartered Institute of
Procurement & Supply showed that the UK service sector
registered the slowest rate of expansion since March.
The Purchasing Managers' Index dropped more-than-expected to
52.2 in October from 53.9 in September. The expected level was
53.4.
The greenback rose back to 0.7186 against the aussie, just few
pips short of a 4-day high of 0.7183 seen at 8:45 pm ET. Next key
resistance for the greenback is seen around the 0.70 level.
The U.S. ISM non-manufacturing composite index for October is
due in the New York session.
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