Forex News
New Zealand’s Unemployment Rate ticked up to 5.7% in the third quarter (Q3) of 2026 from 5.6% in the second quarter, according to the official data released by Statistics New Zealand on Wednesday. The figure came in above the market consensus of 5.5%.
Furthermore, New Zealand’s Employment Change arrived at -0.1% in Q3, down from 0.5% in Q2, compared with the consensus forecast of 0.4%. The participation rate in New Zealand decreased to 70.4% in Q3, compared to 70.7% in the previous reading.
Market reaction to New Zealand’s employment data
The New Zealand Dollar (NZD) attracts some sellers following the employment data. At the time of writing, the NZD/USD pair is trading 0.61% lower on the day to trade at 0.5583.
Employment FAQs
Labor market conditions are a key element to assess the health of an economy and thus a key driver for currency valuation. High employment, or low unemployment, has positive implications for consumer spending and thus economic growth, boosting the value of the local currency. Moreover, a very tight labor market – a situation in which there is a shortage of workers to fill open positions – can also have implications on inflation levels and thus monetary policy as low labor supply and high demand leads to higher wages.
The pace at which salaries are growing in an economy is key for policymakers. High wage growth means that households have more money to spend, usually leading to price increases in consumer goods. In contrast to more volatile sources of inflation such as energy prices, wage growth is seen as a key component of underlying and persisting inflation as salary increases are unlikely to be undone. Central banks around the world pay close attention to wage growth data when deciding on monetary policy.
The weight that each central bank assigns to labor market conditions depends on its objectives. Some central banks explicitly have mandates related to the labor market beyond controlling inflation levels. The US Federal Reserve (Fed), for example, has the dual mandate of promoting maximum employment and stable prices. Meanwhile, the European Central Bank’s (ECB) sole mandate is to keep inflation under control. Still, and despite whatever mandates they have, labor market conditions are an important factor for policymakers given its significance as a gauge of the health of the economy and their direct relationship to inflation.
- AUD/USD falls amid rising geopolitical uncertainty.
- RBA raises rates to 4.85%, but Bullock refrains from forward guidance.
- Iran rejects imminent peace deal claims as US midterm voting unfolds.
The Aussie Dollar drifts lower against the US Dollar late on Tuesday as the US midterm elections are underway, while progress toward a potential diplomatic exit from the US-Iran war stalls after Iran denied claims it was close to a deal. The AUD/USD trades at 0.6965, down 0.44%.
AUD/USD extends losses as US election uncertainty and stalled Iran peace talks overshadow the RBA’s latest rate increase
As we get closer to the first exit polls of the US midterm elections, the focus is on whether Democrats will gain the US House of Representatives and the US Senate. Additionally, what will US President Donald Trump's response be to the election outcome? Meanwhile, Polymarket sees a 75% chance that the Democrats could win the Senate and a 95% chance that they will be the majority in the House.
In the meantime, in the US-Iran conflict, Washington approved the draft memorandum of understanding presented to Iran by the Qatari delegation. Despite this, a Senior Iranian official said that the US and Iran are far from reaching a deal to end the war.
The US JOLTS job openings rose to 7.5 million, up 4.5% from the previous month's 7.19 million. The report showed that the hire rate rose to 3.4% from 3.3%, while total separations remained unchanged at 3.3%. Other data revealed that Factory Orders exceeded August’s reading of 0.3%, coming in at 1.8% MoM.
On Wednesday, the US economic schedule will feature the release of ADP Employment Change and the ISM Services PMI for October.
In Australia, the Reserve Bank of Australia (RBA) raised rates to 4.85% a day ago in a 6-3 vote, with Governor Michelle Bullock adopting a more neutral stance, adding that the three dissenters wanted to wait for more data. She acknowledged that she’s not clear on how high rates must be but refrained from providing forward guidance on the future path of interest rates.
Recently, the S&P Global Services PMI in October improved from 47.8 to 48.5.
AUD/USD Price Forecast: Technical outlook
In the daily chart, AUD/USD trades at 0.6964, keeping a bearish near-term bias as it holds beneath the cluster of simple moving averages (SMA) in the Moving Average Triple around 0.7059. Price remains supported above a series of rising trend lines, with nearby structural demand aligning around the 0.6922 area, while the Relative Strength Index (RSI) at 41.6 hints at stabilizing but still subdued momentum rather than a decisive recovery.
On the topside, initial resistance is seen at the grouped daily SMAs near 0.7059, followed by the horizontal barrier at 0.7198, which caps the broader upside. On the downside, immediate support emerges around the upward-sloping trend-line region near 0.6922, ahead of deeper cushions at 0.6897 and 0.6865, with additional medium-term floors at 0.6833, 0.6673 and the prior break area near 0.6348.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
- New Zealand jobs fell 0.1% in the third quarter against a 0.4% forecast.
- NZD/USD is trading at its session low, its lowest since mid-October.
New Zealand employment fell 0.1% in the third quarter against a forecast 0.4% rise, after 0.5% growth in the second, and the unemployment rate rose to 5.7% against a 5.5% forecast. NZD/USD is trading at its session low just below 0.5600, and it has given back almost all of its climb from the October 14 low just above 0.5550.
The Labour Cost Index rose 0.4% on the quarter against a 0.5% forecast, slowing from 0.7%, and the participation rate fell to 70.4% from 70.7%, so unemployment rose with fewer people looking for work. The Reserve Bank of New Zealand (RBNZ) held its rate on October 28 when a hike had been expected, and weaker jobs and slower wage growth cut into the case for one.
NZD/USD 5-minute chart
New Zealand Dollar FAQs
The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.
The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.
Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.
The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
- GBP/USD holds above its 200-day average, on track for a fifth gain in a row.
- The BoE is forecast to vote 7-2 for a hike to 4.00% on Thursday.
- Money markets price four BoE hikes by September 2027, Thursday's included.
The Bank of England (BoE) is forecast to raise the UK's Bank Rate to 4.00% from 3.75% on Thursday, and money markets have three more hikes priced after that one. GBP/USD holds just above 1.3400 and its 200-day Exponential Moving Average (EMA), on track for a fifth straight gain. What's left for the Pound to get from Thursday is in the guidance, not the decision.
The 7-2 forecast needs four of September's six holders to change their vote
Three of the BoE's nine policymakers voted for a hike on September 17: Chief Economist Pill and external members Greene and Mann. BoE Governor Bailey and Deputy Governors Breeden, Lombardelli and Ramsden voted to hold, but said persistent energy costs could strengthen the case for one. Those four are the votes the forecast needs, and a hike would be the BoE's first since August 2023.
BBH expects external members Dhingra and Taylor to keep voting to hold, which gives 7-2. Nomura expects a 6-3 vote again, with the six on the other side. A narrower hike could read as less appetite for the three more priced after it, and those three are what GBP/USD has been buying.
Money markets price four hikes and most banks see two
Money markets fully price four quarter-point hikes by September 2027, according to LSEG data, which would take the Bank Rate to 4.75%. Of 30 research houses, 27 expect a hike on Thursday, and most of them expect one more in February and a stop at 4.25%. BMO's Mark McCormick expects a one-off, and ING has called the market's pricing extreme.
Governor Bailey has said unconditional promises on future rates aren't appropriate, and the market has priced a year of hikes without one. BBH has warned that the guidance could test the full point of hikes priced for the next 12 months and cap the Pound's gains. A Monetary Policy Report that leans toward February and a stop could take some of that pricing out, and GBP/USD would likely fall if it did.
Both Fed dissenters wanted the quarter-point hike the BoE is forecast to make
The Fed held its rate at 3.75%-4.00% on October 28, with Fed Governor Cook and Cleveland Fed President Hammack voting for a quarter-point hike. US job openings rose to 7.523 million in September against a 7.13 million forecast, and factory orders rose 1.8% against 1.2%. GBP/USD's session high, short of 1.3450, came minutes before those releases, and it has traded below that high since.
Brent fell to near $104 a barrel on talk of progress in US-Iran negotiations, after Iran's negotiating team said there had been no new development. Petrol and diesel drove much of September's inflation overshoot, when UK inflation rose to 3.5%. A cheaper Brent is the one way the BoE's case can weaken before Thursday without anyone voting.
The BoE decides between Wednesday's ADP count and Friday's payrolls
The BoE's decision, minutes and Monetary Policy Report are due at 12:00 GMT on Thursday, and Governor Bailey speaks at 12:30 GMT. Cleveland Fed President Hammack, one of the two October dissenters, speaks at 13:50 GMT, 110 minutes after the BoE has voted on the hike she wanted for the US. Chief Economist Pill briefs businesses on Friday.
Wednesday's US numbers come first, with the Automatic Data Processing (ADP) private jobs count at 13:15 GMT forecast to slow to 69K from 90K. The Institute for Supply Management (ISM) survey of services firms follows at 15:00 GMT, where 54.8 is expected after 54.9. Friday's Nonfarm Payrolls (NFP) at 13:30 GMT are forecast at 65K after 29K, with the unemployment rate forecast at 4.2%. Each feeds the Fed's December decision, the Dollar side of GBP/USD's rate gap.
Midterm results arrive from Wednesday, with prediction markets near 75% that Democrats take the Senate, and Reuters reported traders holding back from big Pound bets ahead of them. New York Fed President Williams speaks at 09:30 GMT on Friday and Fed Vice Chair for Supervision Bowman at 17:15 GMT, either side of payrolls.
Pound levels into the BoE vote
Resistance: Monday's high just under 1.3450 is the highest GBP/USD has traded since September 16, and Tuesday's whole range is inside Monday's. Above it, 1.3500 is where the pair turned lower on September 16, the day of the Fed's hike.
Support: The 200-day EMA just under 1.3400 held Tuesday's dip by a few pips. Below it, 1.3300 is the October 29 low, and the October 28 low just above 1.3250 is where the five-session run began.
Bias: Lean short below 1.3450 into Thursday, because the pricing has run further than most research houses expect the BoE to go. A daily close back under the 200-day EMA opens 1.3300, then 1.3250. The daily Stochastic Relative Strength Index (Stoch RSI) is overbought near 85 and starting to roll over. A daily close above 1.3450 puts the pair through Monday's high and ends the short case.
GBP/USD daily chart
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
UOB’s Ho Woei Chen and Peter Chia note that the People’s Bank of China (PBoC) has announced an increase in the foreign-currency reserve requirement ratio to 6%, effective 15 November, to slow Chinese Yuan (CNY) appreciation. The analysts maintain a cautious medium-term outlook on CNY amid widening interest rate differentials and expect a modest recovery in USD/CNY. UOB will update its forecasts on 6 November.
PBoC move reinforces cautious CNY outlook
"In a statement on Tue (3 Nov), the People’s Bank of China (PBOC) said the reserve requirement ratio for foreign currency deposits (FC RRR) will be increased by 2 ppt to 6% from the current 4%, effective from 15 Nov."
"The PBOC uses adjustments to the FC RRR as a primary tool to manage domestic foreign-currency liquidity and stabilise the value of the CNY."
"We have recently shifted to a cautious medium-term outlook on CNY due to the widening interest rate differential with the USD."
"The FC RRR hike further reinforced our view of a modest recovery in USD/CNY from here."
"We will update our USD/CNY forecasts at the upcoming FX & Interest Rate Monthly Report scheduled to be released on 6 Nov."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
On Tuesday, the Bank of Mexico released its October private economists survey in which most analysts revised their inflation expectations upward and see the USD/MXN exchange rate finishing the year near the psychological 18.50 mark.
The median of economists sees headline inflation at 3.88% in 2026, up from September’s 3.87%, and at 3.85% in 2027. Core inflation is seen at 3.82% by year-end, down from 3.90%, and at 3.82% in 2027.
Mexico’s economy is seen growing 1.50% in 2026, up from 1.40% a month ago, and for 2o27, analysts see growth approaching the 2% mark at 1.83%.
Regarding monetary policy, Banxico is projected to hold rates unchanged at 6.50% through the rest of 2026 and into 2027, while the USD/MXN exchange rate by the year’s end will hit 18.39 and, in 2027, will be near 18.64.
Banxico FAQs
The Bank of Mexico, also known as Banxico, is the country’s central bank. Its mission is to preserve the value of Mexico’s currency, the Mexican Peso (MXN), and to set the monetary policy. To this end, its main objective is to maintain low and stable inflation within target levels – at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%.
The main tool of the Banxico to guide monetary policy is by setting interest rates. When inflation is above target, the bank will attempt to tame it by raising rates, making it more expensive for households and businesses to borrow money and thus cooling the economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN. The rate differential with the USD, or how the Banxico is expected to set interest rates compared with the US Federal Reserve (Fed), is a key factor.
Banxico meets eight times a year, and its monetary policy is greatly influenced by decisions of the US Federal Reserve (Fed). Therefore, the central bank’s decision-making committee usually gathers a week after the Fed. In doing so, Banxico reacts and sometimes anticipates monetary policy measures set by the Federal Reserve. For example, after the Covid-19 pandemic, before the Fed raised rates, Banxico did it first in an attempt to diminish the chances of a substantial depreciation of the Mexican Peso (MXN) and to prevent capital outflows that could destabilize the country.
MUFG strategists note Indonesia’s October Consumer Price Index (CPI) and core inflation both surprised on the downside, giving Bank Indonesia (BI) limited inflation-based justification to tighten policy. Nevertheless, the Indonesian Rupiah (IDR) remains weak above USD/IDR 18,000 and bond yields have risen, leading them to stay cautious and warn that a BI rate hike cannot be ruled out if currency pressures intensify.
Bank Indonesia constrained by weak Rupiah
"Indonesia's October CPI came in softer than expected, with headline inflation easing to 3.23%yoy from September's 3.28%yoy print and core inflation slowing to 2.56%yoy from 2.84%yoy, giving Bank Indonesia little inflation-driven reason to tighten, though IDR weakness remains a binding constraint."
"USD/IDR held above 18,000, while the 10-year Indonesian bond yield rose to 7.7%. Thursday's Q3 GDP release and Friday's FX reserves data will be key ahead of BI's 18 November policy meeting."
"We remain cautious on IDR, and a BI hike cannot be ruled out in the next policy meeting should currency pressures intensify."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- USD/MXN surges over 1.40% to 18.84 amid US election uncertainty.
- Mexico's manufacturing PMI slips into contraction territory at 49.5.
- Strong US job openings and Factory Orders bolster Dollar demand.
The Mexican Peso (MXN) loses ground against the US Dollar (USD) on Tuesday amid ongoing developments in the US mid-term elections, with investors turning cautious as they await the results and the composition of the US Congress. The USD/MXN trades at 18.84, up by over 1.40%.
USD/MXN rebounds sharply as election uncertainty, weak Mexican manufacturing activity and solid US data pressure the Peso
Market mood is upbeat, with Wall Street poised to end the session with gains. In the FX space, the Greenback appreciates against emerging-market currencies, including the Peso.
The US Dollar Index (DXY), which measures the performance of the buck against six currencies, erased its previous losses, rising a modest 0.05% to 101.85. Tensions in the Middle East, their impact on energy prices, and the uncertain outcome of the US midterm elections are exerting pressure on the Mexican currency.
Data in Mexico showed that business activity in the manufacturing sector contracted. The S&P Global Manufacturing Purchasing Managers Index (PMI) in September contracted from 50.3 to 49.5. Companies attributed the fall in production to “cash flow difficulties, inflationary pressures, raw material shortages and subdued sales.”
The Bank of Mexico (Banxico) released its private economists' survey, in which the central bank said it expects inflation to remain within its 3% plus or minus 1% range. Additionally, analysts see the economy growing below the government’s 2% GDP forecast this and the next year, and that Banxico will hold rates unchanged through the end of 2027
In the US, the Job Openings and Labour Turnover Survey (JOLTS) for September rose from 7.19 million to 7.5 million, up 4.5% from the previous month, while Factory Orders rose from 0.3% to 1.8% MoM in September, revealed the US Census Bureau.
USD/MXN traders are watching US midterm elections. Polymarket gives Democrats a 75% chance of winning the Senate and 96% of controlling the House.
USD/MXN Price Forecast: Technical outlook
In the daily chart, USD/MXN trades at 18.8383, maintaining a bullish near-term bias as spot holds well above the triple simple moving average cluster, whose latest reading sits near 17.82 and reinforces the underlying uptrend. The pair is also comfortably above the horizontal support at 16.89, while the Relative Strength Index (14) around 65 suggests firm but not extreme bullish momentum after cooling from prior overbought conditions.
On the downside, initial support is seen at the latest close around 18.84, followed by the 50/100/200-day simple moving average area near 17.82, before a more distant structural floor at the horizontal line of 16.89. On the topside, the broader advance would face a major technical barrier at the downward resistance trend line, currently projected around 21.08.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Mexican Peso FAQs
The Mexican Peso (MXN) is the most traded currency among its Latin American peers. Its value is broadly determined by the performance of the Mexican economy, the country’s central bank’s policy, the amount of foreign investment in the country and even the levels of remittances sent by Mexicans who live abroad, particularly in the United States. Geopolitical trends can also move MXN: for example, the process of nearshoring – or the decision by some firms to relocate manufacturing capacity and supply chains closer to their home countries – is also seen as a catalyst for the Mexican currency as the country is considered a key manufacturing hub in the American continent. Another catalyst for MXN is Oil prices as Mexico is a key exporter of the commodity.
The main objective of Mexico’s central bank, also known as Banxico, is to maintain inflation at low and stable levels (at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%). To this end, the bank sets an appropriate level of interest rates. When inflation is too high, Banxico will attempt to tame it by raising interest rates, making it more expensive for households and businesses to borrow money, thus cooling demand and the overall economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN.
Macroeconomic data releases are key to assess the state of the economy and can have an impact on the Mexican Peso (MXN) valuation. A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only does it attract more foreign investment but it may encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this strength comes together with elevated inflation. However, if economic data is weak, MXN is likely to depreciate.
As an emerging-market currency, the Mexican Peso (MXN) tends to strive during risk-on periods, or when investors perceive that broader market risks are low and thus are eager to engage with investments that carry a higher risk. Conversely, MXN tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note that USD/SGD held a tight range on Monday, with the Singapore Dollar supported by a slightly firmer SGD NEER. They expect the SGD NEER to stay 1.30%–1.80% above its policy midpoint, implying USD/SGD should remain confined near current levels, with broader Asian FX still pressured by portfolio outflows and cautious sentiment ahead of US midterm elections.
Dollar-Singapore pair seen sideways
"24-HOUR VIEW: Yesterday, we expected USD “to trade in a range between 1.2775 and 1.2800.” We were not wrong, as USD traded within a 1.2775/1.2797 range before settling at 1.2794 (+0.10%). We continue to expect range-trading today, but the slightly firmer underlying tone suggests USD is likely to trade in a higher range of 1.2785/1.2810."
"1-3 WEEKS VIEW: In our most recent narrative from one week ago (27 Oct, spot at 1.2810), we highlighted that USD “is likely to trade between 1.2775 and 1.2835.” Since then, USD has traded within a 1.2771/1.2837 range. With no clear increase in either downward or upward momentum, we continue to expect USD to trade between 1.2775 and 1.2835."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- DJIA gives back all of Monday's gains and hits its lowest since October 14.
- Chip stocks lift the Nasdaq and S&P 500 after three losing sessions in a row.
- Midterm votes are counted ahead of Wednesday, with October payrolls due Friday.
Gains in chip stocks have lifted the Nasdaq Composite and S&P 500 on Tuesday after three losing sessions, while the Dow Jones Industrial Average is moving the other way. It has given back all of Monday's gain and is trading near 51,700, just below Friday's close. Its session low near 51,500 is its lowest since October 14.
Apple (AAPL) is weighing on the Dow after Monday's results disappointed analysts, including a gross margin forecast and fiscal fourth-quarter iPad sales that missed estimates. After the results, HSBC cut its forecast for Apple's share price by $6, to $360.
Advanced Micro Devices (AMD) is up ahead of its third-quarter results, and Broadcom (AVGO), Micron (MU) and Nvidia (NVDA) are higher too. It's the reverse of Monday, when the Nasdaq Composite fell more than 1% and the Dow rose. The NASDAQ 100 is still about 10% below its recent high, against less than 6% for the Dow from its August peak.
On the calendar
US midterm votes are counted after Tuesday's polls close. Wednesday is the first session where the results for control of the House and Senate from January can be traded. Prediction markets put Democrats near 75% to take the Senate, and investors and analysts said stocks aren't yet priced for a Democratic sweep of both chambers.
The Automatic Data Processing (ADP) employment count for October is due at 13:15 GMT on Wednesday, forecast at 69K after 90K, and the Institute for Supply Management (ISM) services index follows at 15:00 GMT, forecast at 54.8. October Nonfarm Payrolls (NFP) are due at 13:30 GMT on Friday, forecast at 65K after 29K, and both counts feed the Fed's December rate decision.
On the charts
The drop from the late-October high near 52,900 has taken back about half of the climb that started just above 50,500 on October 1. The index is below its 50-day Exponential Moving Average (EMA) near 52,100 for a third session, and the 200-day EMA is near 50,750. Daily momentum has cooled out of overbought, where it was for most of the second half of October.
Dow Jones daily chart
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
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