Stronger Dollar, risk sentiment positive

Frank Walbaum

Important news this week

Tue, 06th 08:35 CET JP BoJ Gov Uead Speech.
Wed, 07th, 20:00 CET US FOMC Meeting Minutes.
Fri, 09th, 14:30 CET CA Unemployment Change/Employment Rate.

USD starts stronger as markets search for direction

The US Dollar is starting the new week with strength, with the Dollar Index pushing higher. Gold is moving lower, while Silver remains relatively stable. Crypto is rising, and AUDUSD is also slightly higher, pointing to continued positive risk sentiment. EURUSD remains weak, while GBPUSD is moving sideways.

Markets are generally mixed and appear to be searching for direction. Rising bond yields could provide part of the answer, as higher yields may support the USD while also creating pressure on risk assets.

Market talk

AUDUSD is today's focus as a potential gauge for broader risk sentiment. The pair is holding relatively well despite renewed USD strength, which suggests that investors are not yet moving strongly into defensive positioning. If AUDUSD continues higher, it could support the view that the current risk-on environment remains intact.

Bond yields could become increasingly important for the next market direction. A sustained rise in yields can strengthen the Dollar by making US assets more attractive, but it can also challenge equity valuations by increasing financing costs. This creates a potentially difficult balance for markets, particularly if yields continue rising while equities remain near elevated levels.

Tendencies in the markets

Equities positive, USD strong, crypto positive, oil weaker, metals positive, JPY stronger.

Author

Frank Walbaum

AUD/USD turns south toward 0.6900 as USD firms up

AUD/USD sees fresh selling and drops toward 0.6900 in late Asian trading on Monday, as renewed US Dollar strength weighs on the pair amid lingering Middle East and Russia-Ukraine geopolitical tensions. Focus remains on Oil prices, Treasury bond yields, and RBA expectations for fresh trading impetus in the major.

USD/JPY retakes 158.00 amid hawkish BoJ bets, firmer USD

USD/JPY erases losses and retakes 158.00 in the Asian session on Monday, trading within a one-week-old range. Geopolitical uncertainty continues to underpin the US Dollar, despite fading Fed rate hike hopes, supporting the pair's rebound. However, further upside could be capped by hawkish BoJ expectations and looming intervention risks that could support the Japanese Yen.

Gold flat lines below $4,150 as rallying USD offsets receding Fed hike bets

Gold extends its consolidative price move, trading below $4,150 heading into the European session, and moves within a range held over the past week or so. As investors look past Friday's disappointing US jobs data, the US Dollar regains strong positive traction and rallies to a fresh high since April 2025. This is seen as a key factor capping the commodity, though receding bets for an October rate hike by the Federal Reserve help limit the downside.

BNB: Derivatives back bullish upside continuation

BNB, formerly known as Binance Coin, edges lower trading around $790 on Monday after posting three consecutive weekly gains. Rising Open Interest and positive funding rates suggest that bullish positioning is strengthening in the derivatives market.

ISM Services PMI expected to show robust US economy in September

On Monday, we’ll get the latest read on the US services sector when the Institute for Supply Management publishes its September gauge. Consensus points to a marginal uptick to 55.7 from August’s 55.4. If confirmed, the reading is unlikely to significantly dent the current sector’s resilience and confidence in the broader economy.

The Euro is near a one-year low: Inflation could trigger its rebound, not its fall

EUR/USD has fallen to its lowest level since May 2025. The pair hit 1.1312 on Wednesday and trades well below the January peak of 1.2082. The decline reflects a powerful combination of US Dollar strength, geopolitical uncertainty and renewed concerns about Europe's exposure to higher energy prices.