On October 17, after the opening of the cotton market, the previous day's gains were reversed, and the strong performance of the US dollar and the pressure of the new cotton harvest forced speculators to dare not easily do more. The dollar index surged to an 11-week high on the same day, and good weather in the U.S. cotton region prompted a smooth harvest of new U.S. cotton.
The dollar index surged to an 11-week high that day, with traders already expecting the Fed to cut interest rates at its November meeting. In addition, the market has also digested Trump's plans to implement tax cuts, financial deregulation and tariff increases, which have a positive impact on the dollar.
In terms of weather, in the next 6-10 days, there will be more rainfall in Texas, the probability of rainfall in the southeast is normal, the temperature in Texas, the delta and the southeast is on the high side, and the new cotton harvest is expected to continue smoothly.
On the same day, international oil prices rebounded slightly after falling for four days, weak demand in China and a temporary calm in the Middle East led to lower prices. Still, most traders believe it only takes a moment for a significant upward change in price to occur.
Under the dual pressure of the new cotton harvest and the strong US dollar, ICE cotton futures fell sharply during the day, the main December contract once nearly 70 cents, followed by bottom-buying and speculative short-covering to help cotton prices recover some of the lost ground.
From the latest data, September US retail sales data is good, the market expected retail sales growth of 0.3%, but the actual growth of 0.4%. The data raised expectations of a smaller rate cut by the Federal Reserve. Meanwhile, despite the European Central Bank's earlier interest rate cut, the US dollar index rose again.
The market awaited Friday's release of the U.S. cotton export weekly report, news that the market demand has increased after the recent drop in cotton prices, factories are not sufficient raw material inventories, cotton prices near 70 cents can stimulate more demand.
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