The dollar’s rally that commenced during the Federal Reserve’s press conference last week encountered a halt yesterday, and the greenback is predominantly weaker today. In light of Sweden’s unexpected rate cut, the krona is outperforming the G10 currencies, showing a notable increase. The preliminary September PMIs exhibited a general softening; however, the overall impact appears to be limited. Fed Chair Powell addresses the market shortly after noon ET today, and this event could serve as a significant catalyst.

The dollar has experienced selling during the technical retracements observed in last week’s recovery. The dollar shows a varied performance against emerging market currencies, with central European currencies typically exceeding the performance of Asia Pacific currencies. Tokyo markets were closed for the national holiday today. Outside of China and Hong Kong, most of the other large bourses experienced gains, with Taiwan leading the way with a 1.4% rally. Europe’s Stoxx 600 has increased by over 0.5%, fully recovering losses incurred during the previous two sessions. US index futures show minimal movement. Bonds are generally exhibiting strength. Benchmark 10-year yields are showing a slight decline, with the 10-year UK Gilt yield down by a few basis points.

In a similar vein, the 10-year US Treasury yield stands two basis points lower at approximately 4.13%. Gold has continued its upward trend, reaching $3791 in Europe, but is now experiencing a pullback as the North American market approaches its opening. In light of the recent surge, the initial support level may be around $3760. November WTI is currently experiencing a period of consolidation within a range of $61.85 to $62.60. Following a rally of approximately 1.65% in response to the FOMC statement last week, the Dollar Index experienced a consolidation downward yesterday. The value approached 97.30. The value decreased to approximately 97.20 today. The 97.00 level represents the (50%) retracement of the bounce observed after last week’s Federal Reserve meeting. A rise above 97.60 may enhance the technical outlook.

The US is steadily approaching a government shutdown by the end of the month. Each party obstructed the other’s attempt for a temporary extension. The Senate and House are currently in recess, setting the stage for a suspenseful week ahead. The initial September PMI presents a potential headline risk. The composite is anticipated to have decelerated for the second month in a row. Fed Governor Bowman and Atlanta Fed President Bostic, who is a non-voter this year, are scheduled to speak prior to Chair Powell’s address on the economy at 12:35.