In China, it is the mid-autumn holiday and the day of the founding of the PRC. Because of this event, market participants will not receive statistics on the Chinese economy - the markets of China will be closed for an entire week.
The decision of the RBA on the basic interest rate did not provide much of a surprise. In this context, in regards to the Australian dollar, there are no interesting ideas so far, and AUD will move in the general trend of major currencies. Since the beginning of the new month, market participants continue to receive statistical data on business and consumer activity indices - some of these statistics have already been published, while the remaining data is to be expected in the near future.
It is worth recalling that China's PMI in September rose to 52.4, reaching its maximum in five years. The PMI index for the UK construction sector is expected to be above 50, which indicates a favourable situation in the construction sector. The construction sector in the UK, like in other countries, occupies a significant weight in the country's GDP, and with high business activity in construction, it is possible to draw a conclusion about the general state of the economy.
In the European economy, the PMI index continues to grow. The PMI indices of the euro zone are confidently demonstrating the increase, forcing the monetary authorities to focus more intensively on developing a plan for the normalization of monetary policy. With the beginning of autumn, the idea of a reflagration strategy returned to the market, the US dollar being the beneficiary. To such a development of the situation, market participants are being pushed by the Fed. However, not all managers and exchange speculators consider this option to be a priority. So, with the beginning of the strengthening of the dollar index, the growth of net open short positions continues, which indicates a strong resistance of many market participants to such a trend.
The main judge in the dispute between bulls and bears on the dollar index will be the American economy. Only the growth of labour productivity, coupled with an increase in the speed of money circulation and reasonable inflation targeting, can ensure a steady growth of the US economy, and as a result, a steady growth in the US dollar index.
Most likely, we should wait for the consolidation of the dollar index at current levels, and perhaps, a small decrease. We wish you profitable trading!