**America’s FX News Wrap: US Stocks Claw Back, USD Rises**
*Adapted from content by Adam Button at ForexLive, via TradingView News*
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**Key Highlights for October 13:**
– US equities recovered some lost ground after a turbulent week, closing higher on Friday.
– The US dollar maintained upward momentum, supported by risk aversion and data.
– Treasury yields steadied but remained elevated as investors assessed Fed cues.
– Oil, gold, and other safe havens reflected ongoing Middle East risk premium.
– The FX market had notable moves, particularly in USD/JPY, EUR/USD, and commodity currencies.
This wrap provides a detailed analysis of the day’s main drivers across forex, equities, and commodities for traders and investors. We look at how the US dollar responded to macro conditions and delve into market sentiment with an eye on the week ahead.
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## **1. Risk Sentiment: Markets Claw Back**
Global risk sentiment showed tentative signs of improvement, though underlying caution persisted. After a week marked by volatility stemming from inflation data, Federal Reserve uncertainty, and geopolitical tensions, Wall Street stocks managed to end Friday on a positive note.
**Wall Street Recap:**
– The S&P 500 finished up 0.45%.
– The Dow Jones Industrial Average gained 0.11%.
– The tech-heavy Nasdaq rose 0.63%.
Equities had spent much of the week in a defensive posture. Investors worried about persistent inflation after the slightly hotter-than-hoped US CPI reading on Thursday. Renewed concerns over escalating conflict in the Middle East further dampened sentiment, as did ongoing debates about the future path of Fed monetary policy. However, after an initial dip, broad-based buying came in Friday afternoon, lifting indexes from their session lows.
**Underlying Drivers:**
– Bargain-hunting after recent declines.
– Rebalancing as traders took profits in safe-haven assets.
– Technical support levels held, inviting short-covering and new longs.
Despite the late recovery, markets closed the week with net losses, underscoring the cautious outlook. Defensive positioning in bonds and commodities kept a lid on risk appetite overall.
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## **2. US Dollar Advances Across the Board**
The US dollar resumed its climb, continuing a dominant uptrend seen over recent months. The greenback was supported by rising Treasury yields, robust US economic data, and ongoing demand for safety.
**Dollar Index (DXY):**
– DXY broke back above 106.70, near highs of the week.
– The move reflected a broad-based rally against both major and minor currencies.
**Key Contributing Factors:**
– Fed rate hike expectations anchored by sticky inflation data.
– Intensifying geopolitical uncertainty raising safe-haven demand.
– Weaker data and growth concerns abroad, especially in Europe and China.
**Noteworthy Dollar Pairs:**
– USD/JPY: The pair climbed above 149.60, approaching levels that previously triggered jawboning and intervention threats from Japanese officials.
– EUR/USD: The euro fell below 1.0525, weighed by diverging growth outlooks and expectations of a dovish ECB.
– GBP/USD: Sterling drifted to 1.2140 as UK growth numbers underwhelmed and risk sentiment stayed tepid.
– USD/CAD: The loonie faltered despite higher oil, signaling broader dollar strength.
The resilience of the dollar was notable given the late-day risk rally in stocks. Traders remained wary of any developments that could revive volatility, especially in the context of slumping global demand and a hot US CPI print.
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## **3. Treasury Yields Steady, Remain Elevated**
US government bond yields steadied but stayed close to multiyear highs. The US 10-year yield oscillated around the 4.60% mark, down marginally from Thursday’s highs but still reflecting restrictive financial conditions.
**Key Yield Levels:**
– 10-year note: ~
Read more on GBP/USD trading.