The US dollar regained momentum and moved higher against the basket of major currencies on Thursday. The dollar index was up 0.2% in Asia, on probe above 98.00 barrier and approaching Monday’s seven-month high at 98.14.
The last of three pre-election debates between presidential candidates Hillary Clinton and Donald Trump, took part in Las Vegas last night. Nothing significantly new was heard, with candidate Donald Trump triggering waves of comments on social media after his remarks of throwing out drugs and illegal immigrants from the United States, pointing on Mexicans. Trump again used bad words in describing his rival Clinton, after she suggested rising taxes on wealthy people of America.
Trump also said that he would not commit to accepting the outcome of elections in Nov 8 if he loses, challenging the cornerstone of American Democracy.
Snap polls showed that Clinton won the last debate, with numbers showing 52% for Clinton against 39% for Trump.
Mexican peso was among the top winners after the debate, hitting six-week high, as inventors’ confidence in Clinton’s win rose.
Australian dollar was the top loser of Asian session and dropped over 1% after hitting fresh 1 ½ month high against the US dollar. Aussie was dragged by mixed jobs data from Australia that showed a drop in number of employed people by 9.8K in September, stronger than August fall of 8.6K and well below the expectations of 15K rise.
Australian unemployment remained unchanged at 5.6% in September, but release for September was below forecast at 5.7%.
Today’s focus in on ECB’s policy meeting, as investors are looking on comments from central banks’ president Mario Draghi, for indications whether the ECB is poised to taper its bond-buying program that was suggested in bank’s last meeting.
Most of market participants do not expect any significant action from ECB today and expect the central bank to postpone the decision until December.
However, Draghi’s comments will be listened carefully, as markets are looking for more hints about central banks near-term steps. Signals for need of more stimulus would sent already weak single currency lower, while firmer signals of reducing bond purchase program would boost the Euro.
The single currency remains at the back foot ahead of ECB’s meeting and stabilizes below 1.1000 level, with key short-term support at 1.0950, being reached in early hours of today’s European session.
The dollar firmed against Japanese yen and is back above strong support at 103.50, which was cracked on Wednesday’s dip to correction low at 103.15.
Sterling remains supported against the dollar and holds near fresh high, posted on Thursday, after better-than-expected UK inflation data boosted the pound, but shows strong hesitation at key near-term barriers above 1.2300 level.
Oil prices maintain strong bullish sentiment on hopes of production cut that was previously agreed between oil producers. The oil received additional support on Wednesday, when US Crude stocks unexpectedly fell by 5.2 million barrels, against the expectations of 2.2 million barrels build.
US Crude oil spiked to fresh, over one year high at $52.21 on Wednesday, on probe above former high at 51.65, posted on 9 June.
Oil prices eased in early Thursday’s trading, down 1.79% from yesterday’s high and losing 0.52% from Thursday’s open. The move is seen as correction of strong two-day rally and fresh attempts higher are expected in the near-term.
Asian stocks advanced on Thursday, supported by strong U.S. earnings and oil prices hitting near a 15-month high, riding on fresh US dollar’s momentum.
MSCI Index rose 0.2% for the session; Japan’s Nikkei was up 1%, while Hong Kong’s Hang Seng index rose 0.5%.
European stocks opened positive on Thursday. UK’s FTSE 100 index was up 0.33% from opening, German DAX gained 0.11%, while French CAC40 was marginally higher after session’s start. However, most of indices erased initial gains, showing lack of momentum, as markets are waiting signals from the ECB.

Highlights of the day

Europe
UK retail sales are in focus in Europe today, with positive forecast ofv 0.4% rise in September vs 0.3% fall in August, expected to maintain strong support on British pound, if number match or come above forecast.
Data is due 08:30 GMT.
The ECB will deliver its rate decision at the end of the meeting at 11:45 GMT, but widely awaited Draghi’s press conference is due at 12:30 GMT.

America
US weekly jobless claims are expected to tick higher from last week’s lowest numbers since 1973 at 246K, with forecast for today standing at 251K.
Philadelphia Fed Manufacturing Index is expected to fall significantly in October, according to forecast at 5.3 which lies well below September’s 12.8 release.
Release time 12:30 GMT.

Important levels

EURUSD
The Euro maintains weak tone and met target at 1.0950 after final break below psychological 1.1000 hurdle. Weak technicals favor bearish extension below 1.0950, with immediate support at 1.0937 and next significant level at 1.0909. The pair is awaiting signals from ECB later today. Negative scenario could trigger fresh weakness towards 1.08 zone, while supportive comments from Draghi could trigger quick recovery towards 1.1100 resistance zone.
GOLD
Gold made significant progress on Wednesday and finally broke above multi-day congestion. Recovery peaked at $1273 so far and could extend to $1280. Corrective dips are expected to find support at $1260, to keep intact near-term bullish structure. Overall picture remains bearish and only break above $1280 barrier would improve short-term outlook.
WTI Crude oil
Oil price spiked at $52.21 on Wednesday, after eventual break above near-term congestion. Former key barrier at $51.65 was exceeded, signalling further gains which may extend to next target at $54.06.
Correction on profit-taking is facing solid support at $51.00, which guards strong supports at $50.00 zone., Market Analysis