ICM: Dollar Softens ahead of US Midterm Elections, RBA on Hold

ICM, the leading London-based FX and CFDs provider, reported that the dollar was weaker against major currencies as market participants focus on the US midterm elections. The Aussie rallied as the Reserve Bank of Australia left interest rates unchanged.

The dollar index which measures the greenback against a basket of major currencies reversed Friday's gains and settled at 96.32 despite strong data. The Institute of Supply Management reported that the Non-Manufacturing PMI was at 60.3 in October which confirms the strong momentum in the services sector. Market participants shifted their focus to the outcome of the US midterm elections. The Democratic Party has high chances of winning control of the House of Representatives while Republicans are likely to keep the Senate.

The Reserve Bank of Australia left interest rates unchanged at 1.50%. The bank restated that low interest rates are supporting the economy and expected inflation to pick up towards targets. Moreover, the bank raised the GDP forecast for 2018 and 2019 and lowered the unemployment rate forecast to 4.75% in 2020. As per ICM trading platform, the AUDUSD is trading near the 100-day simple moving average at $0.7222.

The Euro advanced against rivals on the comments of the Italian Minister of Economy and Finances. Tria signaled that he was working for settlement on budget with the EU. As per ICM trading platform, the EURUSD rose from a low of $1.1354 to trade higher at $1.1422, and the EURJPY tested the 100-day simple moving average at 129.45.

Gold prices remain caught in a tight range between a support zone near $1226 and a resistance zone near $1237. Gold could benefit from the market uncertainty and risks arising from the US midterm elections. On the other hand, the silver ounce is trading near $14.70.

Oil prices remain soft for the sixth consecutive day, weighed down by the US waivers. The US granted sanction exemptions to Iran's biggest oil importers which lessened the woes of tight market supply. As per ICM trading platform, the West Texas Intermediate crude futures traded at a low of $62.64, and the Brent futures tumbled to $72.58. The American Petroleum Institute will report the US weekly crude oil stock later today.

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