Asian session review: the US dollar has stabilized against major currencies

During today's Asian trading, the US dollar consolidated against major currencies, as market participants took a wait-and-see position ahead of the publication of key data on the US labor market, which will help clarify the state of the economy and may affect the trajectory of the Fed's interest rate. Investors are also watching the news around the US presidential election, which will be held on November 5. Donald Trump and Kamala Harris remain neck and neck in several polls, but some investors have been putting on trades betting Trump will win, lifting the dollar and U.S. Treasury yields. Trump's victory may also slow down the pace of monetary policy easing by the Fed.

The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) rose by 0.03% to 104.01. As for the data, the nonfarm payrolls report for October will be presented today at 12:30 GMT. The employment report for September broke the cooling trend in the labor market and dispelled concerns about the rapid deterioration of the labor market situation. Employers have created the most jobs since March, while the figures for the previous two months were revised upwards, and the unemployment rate fell to a four-month low of 4.1%. It will be difficult to understand from the October employment report whether working conditions are improving as much as expected in the September report. The ongoing strike at Boeing has led to the suspension of 33,000 union workers and the layoffs of some non-union workers. In addition, the number of people employed is likely to decrease due to the devastation caused by Hurricanes Helen and Milton. As a result, employment growth is expected to slow sharply in October - to 115 thousand. The unemployment rate should be more isolated from these events, although not completely protected from them - the unemployment rate is expected to remain at 4.1% in October. Although the October employment report is likely to underestimate the current state of the labor market, experts still see hidden tensions that indicate further softening of the labor market in the near future. Hiring is still narrowly concentrated among industries, the average length of the working week indicates that enterprises use existing workers less intensively, and consumers see a reduction in the number of employment opportunities. Such a background should restrain the growth of the average hourly wage, which is expected to have increased by 0.3%.

The Chinese yuan declined 0.1% against the US dollar, despite favorable Chinese data. According to a report from S&P Global, China's manufacturing activity returned to growth in October as companies ramped up production and purchasing to meet higher demand amid improving confidence. The Caixin manufacturing PMI rose to 50.3 from 49.3 in September. Economists had expected an increase to 49.7. The official PMI survey results showed that the factory activity grew for the first time in six months. The PMI hit 50.1 in October, up from 49.8 in September. Caixin Insight Group Senior Economist Wang Zhe said the manufacturing survey showed that market demand stabilized and optimism improved, suggesting that the new policies implemented by the government had an impact on the sector.