Here is what you need to know on Wednesday, October 27:
The dollar gathered strength against its rivals for the second straight day on Tuesday but the action in major currency pairs remains subdued as investors gear up for key events and data releases. On Wednesday, September Durable Goods Orders and Trade Balance data will be featured in the US economic docket. The Bank of Canada (BoC) will announce its monetary policy decisions at 1400 GMT.
Durable Goods Orders Preview: Five scenarios to trade the event with EUR/USD.
Risk mood: The S&P 500 and the Dow Jones Industrial Average indexes hit new all-time highs on Tuesday but erased a large portion of daily gains before closing modestly higher. The Shanghai Composite is down nearly 1% on Wednesday and the Nikkei 225 is falling 0.25%. US stock index futures trade flat in the early European session. After the closing bell, Google Alphabet reported better-than-expected earnings for the third quarter.
Meanwhile, the 10-year US Treasury bond yield edged lower on Tuesday and seems to have gone into a consolidation phase between 1.6% and 1.65%.
Macro data: On Tuesday, the data from the US showed that New Home Sales surged by 14% in September, compared to the market expectation of 1.5%. Additionally, the Conference Board's Consumer Confidence improved to 113.8 in October from 108.3 in September.
On Wednesday, the Reserve Bank of Australia (RBA) reported that the Trimmed Mean CPI climbed to 2.1% on a yearly basis in the third quarter from 1.6% in the second quarter. This reading surpassed analysts' estimate of 1.8%.
Finally, the GfK Consumer Confidence Index in Germany rose to 0.9 in November from 0.4 in October and beat the market consensus of -0.5 by a wide margin.
EUR/USD continues to trade in a very narrow band around 1.1600 handle ahead of the European Central Bank's highly-anticipated policy meeting.
GBP/USD managed to gain traction on the back of the upbeat CBI retail trade figures on Tuesday but returned below 1.3800 with the dollar preserving its strength.
USD/CAD is staying relatively quiet around 1.2400 early Wednesday. The BoC is widely expected to leave its policy rate unchanged at 0.25% but a reduction in asset purchases could help the CAD stay resilient against its American counterpart.
Bank of Canada Rate Decision Preview: Inflation prospects headline policy review.
AUD/USD advanced beyond 0.7500 after the quarterly inflation data and closes in on the multi-month highs it set at 0.7548 last week.
Gold bulls failed to defend $1,800 on Tuesday and XAU/USD lost nearly 1%. The pair is moving sideways around $1,790 on Wednesday while waiting for the next catalyst.
Cryptocurrencies: Bitcoin met resistance near $64,000 on Tuesday and lost more than 4%. Currently, BTC is trading near $60,000 and additional losses could be witnessed if this support fails. Ethereum preserves its bullish momentum eyes new all-time highs near $4,400.
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.