The USD soared high today as the country’s treasury yields hit its highest level since July this year and due to expectations that the US Federal Reserve is considering increasing their interest rate for the third time this year.

Greenback Winning Streak

Last week, the greenback was the net winner for a third successive week running. The currency was able to pull ahead of its major competitors early on in the week before heading backstage on Thursday and then having a more mixed performance on Friday. Today’s events already shows that the greenback is set to soar higher than the rest again.

US Data

U.S. factory activity surged to a more than 13-year high in September even though there were strong gains in both new orders and the prices of raw materials. This is a testament to the strength of the US economy even in light of Hurricanes Harvey and Irma. The Ten-year treasury yield went up by an astonishing 4 points today standing at 2.37 percent. This pushed the greenback about o.5% ahead of its major competitors. The yield later pulled back and went as low as 1.3 basis points on the day and stood at 2.34 percent.

The US economic forecast was also given a boost today by other data that were presented. The most noticeable one is the rise in construction spending in August. The rapid growth in manufacturing activities coupled with the increase in prices added to the speculation that the Fed will raise interest rates by end of the year.

GBP Weak Performance

The GBP, on the other hand, performed poorly during this morning’s London session. This can be attributed to Brexit Issues (the conservative party has gotten underway today) that has been plaguing the economy for months now. The sterling took a further hit after U.K.’s manufacturing PMI report was way below expectation. Even though some good news came about inflation, the market apparently didn’t respond to it.
The euro performed badly at both the Asian and London session today due to the weekend events in Spaint. The nature of the independence referendum in Catalonia and the Spanish government’s violent reaction to it seem to have hit the currency really hard. If it will recover before the week runs out is still out for debate.

Major Events: Oct 2-6, 2017

• Australian rate decision: Tuesday, 3:30
• UK Services PMI: Wednesday, 8:30. With the GBP currently struggling, a positive data from this sector which happens to be the largest in the UK might see the currency bounce back. The Services PMI score stood at 53.2 in August and it is expected to rise to 53.3 for September.
• ADP Non-Farm Payrolls: Wednesday, 12:15. The data released by ADP always carries weight as they are largest software provider of payrolls in the US. For August, the ADP reported a massive 237k job gain which was beyond expectation, for September though, the figure is expected to fall very low with just 151K expected.
• Janet Yellen talks Wednesday, 19:15. The Fed chair will make a speech at a conference organized in St. Louis. Monetary issues aren’t expected to be part of the speech, but comments like a drop in the core PCE might affect the market.
• ECB Meeting minutes: Thursday, 11:30. This event will definitely have an impact on the market this week especially the anticipated decision about QE tapering. A fast tapering will boost the already weak euro while a slow tapering will see the currency even go lower.
• US Non-Farm Payrolls: Friday, 12:30. The NFP data released in August was a bit disappointing as only 156K job gains were recorded, this data was way below expectation. It will even be more disappointing for September as only 88K job gains are expected.

Current Forex Signals

We sent a Forex signal to buy the USDCHF and sell the EURUSD early on Monday October 2nd. We will provide trade updates to our Twitter feed as the trade progresses.

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