Dollar hits one month low as Treasury yields retreat

Market watch of the day!

Earnings
In the third quarter of 2023, with 17% of S&P 500 companies having reported their actual results, FactSet reports that 73% of these companies have outperformed their earnings per share expectations, and 66% have exceeded revenue expectations.

Meanwhile Mega caps like Amazon, Microsoft and Alphabet earnings are in focus, with expectations of a modest growth in revenue streams.

The dollar

The dollar continued to trade in a tight range although it is on track for a weekly loss. However, the release of GDP numbers set to be released tomorrow could give the greenback some action as the data has the potential to influence the Federal Reserve's course of action, which could ultimately provide support for the dollar.

Additionally, the 10-year Treasury yield, which serves as the benchmark, saw a continued decline on Tuesday, settling at 4.835%, weighing further on the dollar.

Moreover, the increase in U.S. Treasury yields starting from mid-July has made the U.S. dollar more attractive in comparison to other currencies, resulting in a more than 6% rise in the U.S. dollar index. However, the index has shown limited progress since the beginning of October.

BOC

The USD/CAD rose 0.3% ahead of the BOC meeting later tomorrow. According to Reuters survey of economists. it is highly likely that the central bank has concluded its cycle of interest rate hikes and will maintain the rate at 5.00% for a minimum of six months. Most of these economists anticipate a reduction in the second quarter of 2024 due to an expected economic slowdown.

Oil prices

Crude oil prices dropped by 3%, causing the global benchmark Brent to fall below the critical $90 per barrel threshold. On the back of dampening sentiment that there would be supply shortages due to heightened tensions in the Middle East.

Which were helping elevate oil prices for the past 2 weeks.