Forexlive Americas FX news wrap: Strong US data sends the dollar higher.

Forex news for NY trading on October 3, 2018.

In other markets near the US session close shows:

Spot gold fell -$4.82 or -0.40% at $1198.51. The high reached $1208.39. The low extended to $1196.99. The higher dollar helped to contribute to the lower level
WTI crude oil shrugged off a sharply higher build in inventories this week (+7975K vs +1500K est.) and is trading up $1.00 or 1.30% at $76.21. Iranian sanctions will go into effect in November. The worry is that OPEC+ will not be able to offset the decline in supply from the sanctions.
Bitcoin on Coinbase is trading down -$90 at $6437.32

In the US stock market today, the major indices closed higher, but well off the highs.

The Dow closed at another record and was up 0.20% at 26828.
The S&P index was up as much as 16 points at 2639.86, but closed at 2925.51 up 2.08 points or 0.07% on the day.
The Nasdaq closed up 25.539 points or 0.32% at 8025.08 but traded up to 8053 at the highs.

European shares closed mostly higher at the midpoint of the NA session.

Here is the breakdown:

France's Cac rose 0.5%
UK's FTSE rose 0.7%
Spain's Ibex rose 0.8%
Italy's FTSE MIB rose 0.84%
Portugal's PSI20 rose 0.04% (call it unchanged).

In the 10 year note market:

France 0.822, up 3.6 bps
UK 1.579%, up 5.1 bps
Spain 1.537%, unchanged
Italy 3.311%, down -14.1 bps
Portugal 1.895%, unchanged

Germany had a bank holiday today in observance of Unity Day.

The late afternoon fall in the S&P got some of its inspiration from a sharp run-up in US yields today. Near the close for the day, the 10 year yield is now up 11.4 bps. The 30 year yield is up 11.6 bps. Strong economic data and now some hawkish comments from Fed's Powell is the catalyst. Below is a snapshot of the changes and ranges. Note the yield curve also steepened by 5.5 bps to near 31 bps. That is a big change.

In the forex market, the US dollar is ending the day (and the NA session) sharply higher. Fundamentally, there are a number of catalysts:

Amazon announced yesterday that they would increase the minimum wage to $15. That is a big move. Moreover, they want to lead the charge to invoke change on a national level. The minimum wage is down at $7.25. Think the increase in costs for small businesses and its impact on prices.
The ADP employment estimate was higher than expected at 230K vs 184K est.
Markit PMI services came in at 53.5 vs 53.0 expected.
A bigger shock was the US September ISM non-manufacturing index which jumped to 61.6 vs 58.0 expected. That was the best reading since 1997. New orders rose to 61.6 vs 60.4 prior and employment surged to 62.4 vs 56.7 prior. Yikes that was good.
Powell said at the end of the day that the Fed may raise rates past neutral. That has pushed the USD even higher in the last hour of the day

Below is a snapshot of the strongest and the weakest.

The biggest dollar gains are vs. the NZD and the AUD (each over 1.1%), but looking at the changes (and low to high ranges) for the major currencies vs the USD in the chart below, each are at dollar high levels. The dollar is king today.

A look at some individual currency pairs shows:

Looking at the 4-hour chart of the EURUSD, the low in the last flush lower at the end of the day stalled at a lower trend line.

The NZDUSD is one of the weakest currency pairs today. Looking at the daily chart, the price fell back below a broken trend line and is probing toward the low for the year reached in September at 0.6500. A break below could see more of a scoot lower in the pair.

The AUDUSD was another of the big movers today. Looking at the hourly chart, the pair fell to a lower trend line, tried to stall the fall, but could not muster much momentum. The underside of the trend line comes in at 0.7122. Stay below is more bearish.