Dollar bears broke the Matrix

What you need to take care of on Wednesday, November 9:

Financial markets started the day in cautious mode amid the lack of relevant news and ahead of the release of US inflation figures. The American Dollar posted a modest intraday comeback but finished the day plummeting to fresh monthly lows against most of its major rivals.

There was no clear catalyst for the US Dollar’s collapse, although the positive tone of US equities and easing government bond yields put pressure on the greenback after Wall Street’s opening. The yield on the 2-year Treasury note touched an intraday low of 4.65% after peaking at a multi-year high of 4.80% on Friday. It later recovered to settle just below the 4.70% level.

The DJIA rallied for a third consecutive day, but the S&P500 and the Nasdaq Composite posted modest gains.

The results of the US mid-term elections would take a couple of days. They could have long-lasting effects on the American dollar, mainly if Democrats are not able to retain control of both houses. Republicans do not need much to seize control of Congress. If that’s the case, they may oppose President Joe Biden’s massive expenses, which would exacerbate the risk of an economic downturn. Equities will likely collapse, and it does not seem the dollar could benefit much from it.

The EURUSD pair neared 1.0100 and holds on to gains ahead of the US close, despite some discouraging news. A new chapter of the European energy crisis was written after the European Commission said there is no way to create a gas price cap as requested by EU leaders at the end of October.

GBPUSD benefited from the broad dollar weakness also from Bank of England Chief Economist Huw Pill, who said the central bank has “more to do” on tightening the monetary policy. The pair trades around 1.1550.   

The USDJPY pair edged sharply lower, now trading around 145.50. The Japanese cabinet approved a second supplementary budget spending worth 29.1 trillion yen for this fiscal year to fund an economic stimulus package. Meanwhile, AUDUSD hovers around 0.6510 while USDCAD trades in the 1.3420 price zone.

Gold soared and reached levels last seen in September. The bright metal trades around $1,714 a troy ounce. Crude oil prices, on the other hand, were sharply down, with WTI now trading at around $89.40 a barrel.

Loads of noise in the crypto market amid the collapse of FTX and Binance’s decision to save the crypto exchange. Bitcoin plummeted to $18,355, a fresh 2022 low.