In the wake of a surprising NFP release, Friday trading witnessed a dramatic reversal in the US Dollar Index (DXY). The index reached a weekly low as it retreated from the 107.00 level. This shift in market sentiment has accelerated risk appetite, prompting a collective move away from safe-haven assets as the trading week concludes.
On Friday, the US Dollar Index (DXY) experienced a notable decline, relinquishing its grip on the 107.00 level and descending to a fresh weekly low at 105.95.
The release of the US Non-Farm Payrolls (NFP) data on the same day brought about a significant surprise. The report revealed an impressive addition of 336,000 jobs in September, surpassing expectations, which had anticipated a decline to 170,000. This robust figure marked a substantial surge from the previous month’s reading of 227,000, which had been revised upward from 178,000.
Surge in US Nonfarm Payrolls: 336,000 Jobs Added in September, Surpassing 170,000 Forecast
The Federal Reserve (Fed) continues to grapple with persistent inflation, which has become an enduring concern. The prevailing inflationary pressures are causing unease among market participants, raising apprehensions that the Fed may be compelled to maintain higher interest rates for an extended period.
The Technical Outlook on the Dollar Index
On the heels of a robust NFP report, the US Dollar Index made a swift ascent in Friday’s trading, almost reaching the 107.00 mark. However, the broader market sentiment underwent a rapid shift towards risk-taking, causing the DXY to plunge to a fresh weekly low at 105.95.
As the trading week draws to a close, the US dollar finds itself confined to the lower end of the spectrum following a substantial, nearly-1% decline witnessed on Friday. The DXY is poised for a crucial encounter on the daily candlestick charts as it approaches a rising trendline originating from July’s lows at 99.56.
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