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The pair reached 159.95 - right up against the round 160 mark and the highest since September 2. Japanese Finance Ministry currency official Atsushi Mimura said markets should not forget about intervention risks, and the rate pulled back from that zone.
The US publishes its October employment report - the main release of the week for the dollar. Consensus expects +65 thousand non-farm payrolls after a weak +29 thousand a month earlier, and half an hour later the preliminary Michigan index is released.
Gold closed October with a 6.87% decline, and on Friday it hit a new yearly low of $3,870. On Monday the metal is being bought back: XAU/USD around $3,900, up 0.64% for the day, with an intraday high of $3,919. The metal is still about 30% below the all-time peak of $5,600 set in January.
The international rating agency Fitch Ratings has changed its outlook on France's credit rating from 'stable' to 'negative'. The decision was unscheduled: agencies usually publish revisions according to a pre-announced calendar.
The Canadian dollar is strengthening for the third session in a row: the USD/CAD pair headed toward 1.3968 on Friday and traded below 1.3960 - the lowest level in six weeks. Over three weeks, the pair has lost more than 2%.
US September inflation came in above forecast: 3.7% versus expected 3.6%. Today, October 15, the market will receive three more important data blocks - PPI, retail sales and weekly jobless claims.
Gold is recovering for the second day in a row after falling to $4,066, a two-month low. By the morning of October 9, XAU/USD had risen to the $4,140-4,150 area, adding about 2% from the weekly low.
Initial jobless claims in the US came in at 197K versus a forecast of 200K. The market read the data as a signal of no mass layoffs: government bond yields rose, while US indices moved lower.
The DXY dollar index rose to 102.35, approaching the yearly high of 102.50. The main support for the dollar comes from US Treasury yields, which are near more than two-decade highs.
The yield on 30-year US Treasury bonds has risen to 5.70%, the highest level since 2002. Rising yields increase pressure on gold, raise borrowing costs and make stocks less attractive relative to government debt.
EUR/USD fell to 1.1160, its lowest level in 17 months. Pressure on the euro was intensified by weak German industrial orders, which fell 10.6% in August against a forecast of a decline of only 1%.
On Tuesday, October 6, XAU/USD declined to $4,100, the lowest level in about two months. Gold has lost about 12% from its recent peak near $4,696, and the main pressure factor remains the strong dollar and high US bond yields.
Dallas Federal Reserve Bank President Lori Logan said the Fed rate needs to be raised by at least another 50 basis points so that monetary policy becomes moderately restrictive and helps bring inflation back to the 2% target.
Gold first rose to $4,220 after soft US inflation data, but then completely erased its gains and fell to $4,139-4,150. Pressure was intensified by rising US Treasury yields, a strong dollar and more hawkish rate expectations
