Dollar stops its free fall; What to expect this week?

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Forex: The US dollar stopped its negative series from the last few weeks against other major currencies. The greenback erased some of its losses, with the dollar index (DX1213) reporting one of its strongest weeks in the last two years, rising by 2% to 80.80 points on Friday.

The most traded currency pair, EUR/USD, lost the astonishing 320 pips in the last five days and closed at 1.3486. This serious decline was also triggered by speculations that the European Central Bank will lower its interest rate by 0.25 points during its forthcoming meeting. Meanwhile, the GBP/USD and AUD/USD also closed on red territory, with the Cable losing 256 pips to close at 1.5924, and the Aussie falling by 149 pips ending the week at 0.9436. The greenback also advanced against the yen and the USD/JPY rose by 128 pips, with its last quote on Friday being 98.67.

Indices

Stock markets were calmer than usual as neither US nor European indices reported significant movements. Investors’ apprehension for the Fed’s long-term outlook regarding the asset-purchase programme, combined with not that impressive quarterly earnings of US companies, were the main reasons for the sluggish trading throughout the week.

Commodities

On the commodities market, gold and silver also declined in the past week. The precious metal (XAUUSD) lost 2.64% of its value on a weekly basis, reaching a price of $1,316 per troy ounce, while silver (XAGUSD) fell 3.03% for the same period, with its last quote on Friday being $21.85.

What to expect this week?

In the next few days, more financial results from the US earnings season will focus investors’ attention. Some of the companies set to publish their reports are CME Group (CME), Tesla Motors (TSLA), Intercontinental Exchange (ICE), Twenty-First Century Fox (FOX), Time Warner (TWX), Walt Disney (DIS), and Nvidia (NVDA).

On the economic calendar scene, Monday has already seen some important data from the Eurozone as the Markit Manufacturing PMIs for October of Spain, Germany, France, and Italy have been published, revealing mixed results, with Italy and France only reporting negative figures. Later in the day, the US Factory Orders for both August and September are due to be announced. Tuesday will reveal lots of data including the Reserve Bank of Australia Interest Rate decision, the Bank of Japan Governor Kuroda’s speech, the UK Markit Services PMI for October, the Eurozone Producer Price Index for September (YoY and MoM), New Zealand’s employment rate, and the BoJ Monetary Policy Meeting minutes.

Wednesday’ highlights will be the Markit Services PMI for October of Spain, France, Italy and Germany; the Eurozone Retail Sales for September (MoM and YoY) and the US Mortgage Applications. Thursday will show the Australian employment data, the interest rate decision of both the Bank of England and the European Central Bank, the preliminary release of the US GDP along with the country’s Initial Jobless Claims. Friday will close the week with the Reserve Bank of Australia’s Monetary Policy Statement, China’s, Germany’s, and the UK’s trade balances, and also the US Nonfarm payrolls and employment data.

Further reading: ECB Preview: hints, but no action? 6 scenarios

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DF Markets (Delta Financial Markets Ltd.) is a Forex and CFD broker based in London. The company is regulated by the Financial Services Authority (FSA register number 534027) and the protection of client funds is ensured by the Financial Services Compensation Scheme (FSCS). DF Markets is fully committed to provide individual and institutional investors with high quality financial services through implementation of the best business practices. Visit dfmarkets.co.uk Disclaimer: The Content of these charts and analyses does not constitute any form of advice or recommendation by Delta Financial Markets to buy, sell (or refraining from making) any trade or investment. You may wish to seek independent advice before entering into transactions. Delta Financial Markets shall not be held liable by you or any others for any decision made or action taken by you or others based upon reliance on or use of information or materials obtained or accessed through use of these technical analyses and charts. DF Markets assumes no responsibility for errors, inaccuracies or omissions in these materials, nor shall it be liable for damages arising out of any person's reliance upon the information on this page. DF Markets shall not be liable for any special, indirect, incidental, or consequential damages.

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