Mon 1st Nov: Dollar bears continue their run

Yet another weaker than expected US Q3 GDP growth and the weakening consumer sentiment (against the expected), inspired the dollar bears to continue their selling spree. The traders sent the Dollar Index to lower than 84.80 points as the poor economic data fueled the uncertainty prevailing ahead of the US presidential elections.
The release of improved business sentiment index from the Euro-zone, adding to the bull-run of Euro, helped the Currency to surge near 1.28 levels.
Meanwhile, the Japanese currency galloped higher to 105 levels as Japan’s central bank issued a definitive forecast indicating an end of the long run deflation in the country. A sustainable return to rising prices is viewed to be a significant watershed in a recovery that could mark Japan’s escape from the legacy of the 1980s’ bubble.
Given the uncertainty prevailing in the US, we expect the non-dollar currencies to re-test their higher levels, once again. The Wall Street displayed its taste for optimism again this week, rising hard and fast from new lows for the year.
Fall in oil prices was seen as reason for the correction, which sprang the indices amid short term oversold conditions. The Dow closed higher, up 23 points at 10,027 and the Nasdaq Composite Index closed a tad higher at 1,975.