The dollar gave up gains before the weekend (October 18) and fell to 103.46. U.S. retail sales unexpectedly exceeded expectations, but the U.S. real estate market performed weakly, exacerbating the Fed's dovish pricing. Gold soared to a record high of $2,721. The Israeli Prime Minister's residence was attacked. The United States sent B-2 bombers to raid Yemen, impacting the Red Sea supply chain. The market kept a close eye on the potential risk of Israeli retaliation against Iran. Bitcoin hit $68,999 on Saturday, and former U.S. President Trump's approval rating exceeded 60%, boosting crypto buying sentiment.

Last week, Wall Street rose for six consecutive weeks. A series of corporate earnings reports provided support for the stock market. The S&P 500 rose 0.39% to close at 5864.67 points; the Dow Jones Industrial Average rose 36.86 points, or 0.09%, to close at 43275.91 points; and the Nasdaq Composite Index closed up 0.63% at 18489.55 shares. Despite expectations of increased market volatility ahead of the election, stocks may actually continue to rise into November. The outperformance is attributed to investors having already priced in a victory for Republican candidate and former President Donald Trump, whose policies would be more business-friendly in terms of taxes and regulation.

Last Friday (October 18), spot gold surged nearly $29 to a record high, driven by escalating tensions in the Middle East, uncertainty in the U.S. election, and expectations of loose monetary policy. It closed up $28.64, or 1.06%, at $2,721.50 an ounce; gold prices hit an intraday high of $2,722.50 an ounce, a record high.

Silver prices soared in the U.S. session before the weekend, driven by falling Treasury yields. The precious metal continued its gains even as traders reduced bets that the Federal Reserve will ease policy more gently than expected. Silver traded as high as $33.710, its biggest one-day gain since May 17 (+6.36%). The dollar is close to an 11-week high, thanks to strong U.S. economic data, which gives the Federal Reserve greater flexibility in adjusting monetary policy. Recent market expectations that Donald Trump may win the election also supported the dollar's rise. The dollar index (which measures the performance of the dollar against six major currencies) fell back to around 103.50, after hitting 103.87 on Thursday, the highest point since August 2. Global foreign exchange markets fluctuated more sharply last week. Although the dollar pulled back, it remained generally strong. The dollar was supported by the Fed's policies and U.S. economic data, while the yen and the euro continued to be under pressure due to their respective domestic economic weakness. Although the pound and the Canadian dollar have short-term positives, the Australian dollar has returned to above $0.67, and seems to have bottomed out and rebounded. However, future trends are still greatly affected by policies and economic fundamentals. The focus in the coming weeks will be on the policy direction of major central banks, especially further decisions by the Federal Reserve and the European Central Bank. Crude oil futures prices closed lower, recording the largest single-week drop in more than a year. Investors are evaluating weak international crude oil demand and the mixed outlook for the Middle East. On Friday, the price of WTI crude oil futures for November delivery on the New York Mercantile Exchange fell by $1.45, or 2.05%, to $69.22 per barrel, approaching the closing price of $68.17 on September 30 and the closing price of $65.14 on September 10. The spot price of WTI crude oil closed at $68.82 per barrel for the week, down 8.15%.

Bitcoin soared more than $6,200 last week, breaking through $68,000 several times during the week, and the price of the currency continued to fluctuate at this level. World Liberty Financial, an encryption project under the family of former US President and Republican presidential candidate Trump, publicly sold WLFI tokens. Republicans said that if he wins the election in November, he will break the cryptocurrency deadlock.

The yield on the 10-year US Treasury bond fell to 4.07% from 4.10% late Thursday. Traders agree that the Fed will cut its main interest rate by a quarter percentage point at its next meeting in November. Previously, the market had expected the Fed to cut its main interest rate by another half percentage point more than usual, but strong economic data dispelled people's expectations. Currently, the federal funds rate is between 4.75% and 5%.

Outlook for this week:

Looking ahead to this week, US PMI, initial jobless claims data and the Federal Reserve Beige Book will come together, and several officials from the European and American central banks will speak. The US dollar index rose for the third consecutive week, briefly returning to the key 200-day moving average near 103.80, but closed at 103.46 on Friday.

Bitcoin broke through $68,000 over the weekend as the dollar pulled back last Friday (October 18). The price of the currency is challenging to return to the historical high of $73,000. Although some bulls may remain cautious as long as Bitcoin remains below the historical high near $73,000, it is undeniable that the technical outlook is more optimistic than it was a few weeks or even months ago.

On the US economic calendar, S&P Global will release the preliminary October manufacturing PMI on Thursday, and the US Department of Commerce will release durable goods orders on Friday, which the market expects may fall by 1.0% in September, while orders in August remained unchanged. The US Department of Labor will release its initial unemployment claims for the week ending October 19 on Thursday, and data released on Friday will show that the final value of the University of Michigan Consumer Confidence Index for October may be 69.3, compared with the preliminary value of 68.9.

Despite a slight decline at the close last Friday, the US dollar has had a very positive performance in the past few days, continuing its positive momentum for the third consecutive day. Market rumors around the possibility of a small interest rate cut in November, coupled with geopolitical tensions and strong fundamentals, once again supported the upward trend of the RMB.

EUR/USD remains on the defensive, approaching the support level of 1.0800 against the backdrop of a multi-week bearish trend. The German Producer Price Index will be released on October 21. The HCOB Manufacturing and Services PMI for Germany and the eurozone will be released on October 24.

Despite a promising second half of the week, GBP/USD couldn’t resist falling for the third week in a row, this time breaking the key support level of 1.3000. Car production, CBI industrial trend orders and S&P Global Advanced PMI for manufacturing and services will be released on October 24. GfK’s consumer confidence index is expected to close the weekly report on October 25.

USD/JPY remained volatile, rising for the third week in a row and hitting the key 150.00 mark. The usual weekly foreign bond investment will be released on October 24, along with the preliminary Jilin Bank manufacturing and services PMI. On October 25, Tokyo inflation data will be in focus, followed by the final coincidence index and the leading economic index.

Like its risk-linked peers, AUD/USD continued its multi-week decline, despite a good performance in the past few days. The Jilin Bank manufacturing and services PMI will be released on October 24.