Once again the US dollar (USD) has become a safe haven for investors after US Senate lawmakers averted the risk of US insolvency and approved the debt limit of the Biden administration. As a response, the USD exchange value has significantly approached the limit of its annual maximum exchange value measured by the US Dollar Currency Index (DXY), which compares the USD value with six other major world currencies. Furthermore, investors are convinced about the positive numbers of the US labor market, which will be reported today, 8 October 2021.
On 8 October 2021, at 7:39 am CET, according to the DXY we saw the USD at a price level of 94.28 with the current daily strengthening of +0.07%. According to analysts, the data of the technical analysis show that the exchange value of the USD – according to this DXY index – has increased by +4.83 % since the beginning of this year 2021. At the time mentioned, the EUR/USD global currency pair was trading at a mutual exchange rate of US$ 1.1550 per EUR in a hitherto balanced state of exchange rate movement, but in a situation where the single European currency, the euro (EUR), has – in the last few days – recorded a more significant weakening of its exchange rate against the USD.
The strengthening of the exchange rate of the USD – as the main commodity currency – was also reflected in trade prices within the commodity market, especially gold trade, where according to the inverse rule, investor demand from non-dollar destinations decreased and investment gold prices fell. On 8 October, at 7:42 am CET gold traded on the Commodities Exchange Center (COMEX) commodity market at US$ 1,757.30 per troy ounce with the current daily decline of -0.11%. The USD also strengthened more markedly against the Japanese yen (JPY), with the USD/JPY currency pair trading on the Forex market at JPY 111.89 per USD with strengthening of the USD by +0.27% against the JPY.
Stock market investors have also benefited from the strengthening of the USD, where global stocks have rallied and bond yields have risen after US Senate officials decided to avert default on US debt, while global energy price easing decreased fears of stagnation. Meanwhile, the US Federal Reserve (Fed) has said it is likely to begin reducing its monthly bond purchases in November and will continue to raise interest rates next year as since the pandemic crisis the US central bank’s turnover increases. At the same time, investors expect today’s Friday data on 8 October from the US labor market outside agriculture to show continued improvements on the labor market, with the forecast for 500,000 jobs likely to be surpassed by an even higher number, according to a Reuters survey.