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Hello everyone, today XM Forex will bring you "[XM Foreign Exchange Market fy.xmxmxm.cnmentary]: The U.S. dollar index fell below the 100 mark, and safe-haven demand supports the rise of gold prices." Hope this helps you! The original content is as follows:
On November 10, in early trading in Asia, spot gold was trading around US$4,040 per ounce. The price of gold rose last Friday, mainly due to the weakening of the US dollar and the hedging demand caused by the uncertainty of the US government shutdown. Support, the market's expectations for the Federal Reserve's monetary policy have also changed; U.S. crude oil traded around $59.80 per barrel, and oil prices closed slightly higher on Friday. The market focused on the talks between U.S. President Trump and Hungarian Prime Minister Orban. At the same time, tensions in Gaza may resume.
The U.S. dollar came under pressure last Friday, recording weekly losses against both the euro and the yen, as investors struggled to weigh the Federal Reserve's hawkish stance against concerns about the U.S. economy. Due to the ongoing shutdown of the federal government, the October employment report originally scheduled to be released last Friday was not released as scheduled, resulting in a lack of key economic data for the market to refer to, and U.S. bond yields fell slightly.
Behind the fluctuations in the foreign exchange market are multiple factors. The euro found support against the U.S. dollar on expectations that European policy rates will remain stable, while the U.K. and the U.S. are expected to cut interest rates further in 2026. While Fed Chairman Powell's previous fy.xmxmxm.cnments about the risks of easing policy had helped the dollar strengthen for five consecutive days, weak labor data released last Thursday immediately reversed that momentum.
Jeffrey economists pointed out that the market is overly sensitive to any signal about the labor market, and the data gap caused by the government shutdown has exacerbated this fluctuation. He believes the threshold for the Fed to cut interest rates at its December meeting is still high.
The U.S. dollar index fell 0.15% last week, ending two consecutive weeks of gains. Analysts pointed out that although the U.S. dollar has recently regained some safe-haven appeal, the Japanese yen remains the market's top choicedefensive currency. Although the U.S. dollar may rebound in the short term due to the relatively strong U.S. economy, current market sentiment remains weak.
China’s inflation turned positive in October, indicating initial signs of price stabilization. Overall CPI rose 0.2% year-on-year, beating expectations for flat growth and rebounding from -0.3% in September. Domestic demand returned to positive territory, driven by stronger service prices, suggesting domestic demand may be gradually recovering with continued policy support.
Breakdown shows that fy.xmxmxm.cnmodity prices still fell by -0.2% year-on-year, while service prices increased by 0.8%. Food prices remained weak, falling -2.9%. But core CPI (excluding food and energy) accelerated from 1.0% to 1.2%, the highest level since March 2024.
Producer prices also rose slightly, with PPI contracting -2.1% year-on-year, lower than -2.3% in September and higher than the expected -2.3% year-on-year. This was the 37th consecutive monthly decline but reflected narrower price declines in key industrial sectors.
The U.S. consumer confidence index weakened significantly in November, with the University of Michigan consumer confidence index falling from 53.6 to 50.3, lower than the expected 53.2. Both key subcomponents declined: the current economic conditions index plummeted to 52.3 from 58.6. The expectations index fell to 49.0 from 50.3, reflecting widespread concerns about the economic outlook.
The survey pointed out that market sentiment has worsened due to growing anxiety about the federal government shutdown, which has lasted for more than a month.
Inflation expectations also rose, with the one-year outlook rising to 4.7% from 4.6% in October.
The Canadian labor market unexpectedly rose again in October, with employment rising by 66.6 people, far exceeding expectations for a -4-person decline. This strong increase follows an already strong increase of 60.4k in September, indicating continued hiring momentum. The unemployment rate fell to 6.9% from 7.1%, beating expectations of 7.2%, while the employment rate edged up to 60.8% from 60.6%.
However, the fy.xmxmxm.cnposition of October's gains was less encouraging. The overall strong performance was primarily driven by part-time jobs, which increased by 85k, while full-time employment shrank. On a more positive note, private sector employment increased by 73 jobs, the first increase since June.
Wage data also showed modest upward pressure, with average hourly earnings increasing 3.5% year-on-year, accelerating from September's 3.3% increase.
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