The dollar index swung back to gains today after selling pressure saw intraday dips prompt a sell-off in the index towards 85.065 yesterday. The greenback gained firm buying interest from the open against a basket of its major peers, rallying back up towards yesterday’s opening level at one point as it traded at 85.816 before paring some of these early gains towards the end of the European session, trading around 85.640 at the time of writing.
Spot gold prices struggled to find the momentum for further gains as prices fluctuated around yesterday’s close. Support on the downside seems to be holding firm towards $1,231/oz while near term resistance towards $1,240/oz remains untested for now. With the ZEW current situations survey missing expectations of a 15.0 reading in October, coming in at 3.2, and the expectations survey slipping from 6.9 last month to -3.6 this month we could see further support for gold on increasing safe haven demand.
Growth fears continued to weigh heavily on European equities with benchmark indices across the region struggling to push into positive territory. Major indices including the CAC, DAX and FTSE 100 started the session on the back foot, set to resume the previous week’s slide after Monday’s correction. However, early losses were quickly recovered towards the end of the session after a solid start on Wall Street, with stocks buoyed by stronger earnings. Both the S&P 500 and DJIA were up between 0.2%-0.3% at the time of writing, on track to put a stop to the worst three day decline since November 2011 as Citigroup posted better than expected quarterly results, lifting financials across the board higher.
Tomorrow’s session will finally see some key macro data releases after a quiet start to the week, with Chinese and German inflation data and UK unemployment statistics due in the morning. The afternoon will see the release of US manufacturing, inflation and retail data as well as the Fed Beige Book which will all offer investors with further clarity regarding the global macro picture.