Forex Today: Markets stay risk-averse to start the week

Eren Sengezer FXStreet

Here is what you need to know on Monday, October 10:

Investors seek refuge early Monday and risk-sensitive assets struggle to find demand. After closing the previous week on a firm footing on the upbeat US September jobs report, the US Dollar Index (DXY) edges higher toward 113.00. Reflecting the risk-averse market environment, US stock index futures trade in negative territory. US bond markets will be closed in observance of the Columbus Day holiday in the US and trading action could remain subdued in the second half of the day. The European economic docket will feature the Sentix Investor Confidence data for October.

The US Bureau of Labor Statistics reported Friday that Nonfarm Payrolls rose by 263,000 in September. This reading came in higher than the market expectation for an increase of 250,000. Additionally, the publication showed that the Unemployment Rate declined to 3.5% from 3.7% in August. The benchmark 10-year US Treasury bond yield gained more than 1% and advanced to the 3.9% area after the data and the greenback continued to outperform its rivals.

Russian President Vladimir Putin said over the weekend that the attack on the bridge over the Kerch Strait in Crimea was an act of terrorism by Ukraine. In the early European morning, reports of explosions in Kyiv caused by Russian missile strikes forced markets to look for safe alternatives. Meanwhile, Chinese authorities have reportedly decided to partially shut down Changning and Putuo districts in Shanghai due to coronavirus control and prevention.

EUR/USD stays under modest bearish pressure on Monday and continues to stretch lower toward 0.9700. European Central Bank (ECB) policymaker and the Bank of France's head Francois Villeroy de Galhau said that it would take the ECB to bring inflation back to the 2% target in two to three years.

GBP/USD trades in a narrow range below 1.1100 early Monday following last Friday's steep decline. The Bank of England announced on Monday that it will launch a temporary expanded collateral repo facility to support market functioning but the development doesn't seem to be having a significant impact on the British pound's performance against its rivals.

USD/JPY climbed to its highest level since the Bank of Japan's intervention at 145.66 during the Asian session but quickly erased its gains. The pair was last seen trading flat on the day at 145.30.

Gold faced renewed technical selling pressure with a drop below $1,700 and extended its slide below $1,690.

Bitcoin fluctuates in a narrow range below $20,000 as it failed to stage a rebound over the weekend. Ethereum is having a hard time making a decisive move in either direction and moving up and down at around $1,300.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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