Markets will continue to digest the FOMC meeting. During the Asian session, Australia is scheduled to release trade data and home loan figures. Later in the day, Switzerland will report consumer inflation data. More US employment data is due with the weekly jobless claims, leading up to Friday's NFP.
Here is what you need to know on Thursday, November 2:
The Federal Reserve (Fed) decided to keep the fed fund target range unchanged at 5.25% to 5.50%, which was in line with market expectations. The statement issued by the Fed was similar to the one released in September, and Chair Jerome Powell's remarks did not contain any surprises.
Analysts at Wells FArgo on the FOMC:
For the third time in the past four policy meetings, the FOMC decided to keep rates on hold today, although it continues to keep the door open to hiking again. It appears to us that the bar for further rate increases is getting increasingly higher.
The US Dollar Index erased its gains following Fed Chairman Powell's press conference. After trading above 107.00 and reaching weekly highs, the DXY closed below 106.70. The US Dollar faced downward pressure due to increased risk appetite and higher demand for Treasuries. In the stock market, the Dow Jones gained 0.67%, while the Nasdaq rose by 1.64%.
Regarding US data releases on Wednesday, the results were mixed. The ADP employment report showed a modest increase in private payrolls by 113,000, falling below the market expectation of 150,000 but surpassing September's figure of 89,000. The JOLTS jobs opening data exceeded market consensus at 9.55 million. However, the ISM Manufacturing PMI unexpectedly dropped to 46.7 in October, lower than the anticipated reading of 49. These figures had minimal impact on the markets.
Upcoming data from the US includes the weekly jobless claims and Q3 Unit Labor Costs. On Friday, the focus will be on the release of Nonfarm Payrolls.
EUR/USD trim losses after the Fed. It traded under the critical support level of 1.0520 for a few minutes, and then rebounded to 1.0580, supported by the weaker US Dollar.
GBP/USD remained flat around 1.2145 after briefly trading below 1.2100. The pair continues to move sideways with a downside bias. The Bank of England is expected to keep the key rate unchanged at 5.25%, with a potentially divided vote. Governor Andrew Bailey will hold a press conference following the decision.
Japanese authorities expressed concerns about "one-sided moves," but USD/JPY remained firm above 150.00, trading near multi-decade highs. It declined below 151.00 after the FOMC, affected by lower Treasury yields.
USD/CHF lost ground and traded below 0.9100, moving away from monthly highs. Switzerland will report its October Consumer Price Index, with the headline figure expected to remain at 1.7% YoY.
AUD/USD had its best day in weeks, consolidating gains after the Fed decision and approaching the 0.6400 area. If it surpasses that level, further gains are likely. Positive market sentiment is crucial for the pair. Australia will release trade data on Thursday.
USD/CAD reached fresh one-year highs at 1.3898 but then retraced to 1.3860. The pair faces strong resistance near 1.3900.
Gold experienced its third consecutive day of losses, however it closed at $1,978 after bottoming at $1,969.90. Silver also trimmed losses during the American hours and ended around $22.70.
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.