After achieving substantial gains versus its key competitors on Tuesday, the US Dollar (USD) remains relatively calm early Wednesday. The US economic docket will include ADP Employment Change and ISM Manufacturing PMI data for October, as well as JOLTS Job Openings for September. Later in the afternoon, the Federal Reserve (Fed) will publish monetary policy choices, and Chairman Jerome Powell will hold a news conference to discuss the outlook.
Following a weaker beginning, Wall Street’s major indexes gathered traction and scored moderate gains on Tuesday. Despite the positive sentiment, the USD held its ground as US Treasury bond rates rose. Furthermore, month-end flows on October 31st supplied an extra lift to the currency. The US Dollar Index gained more than 0.5% and reversed Monday’s losses before settling above 106.50 on Wednesday. Meanwhile, US stock index futures were last seen trading slightly down on the day, with the 10-year yield oscillating in a tight zone around 4.9%.
For the second consecutive meeting, the Fed is largely expected to maintain its policy rate steady at 5.25%-5.5%. The statement language emphasizing the possibility of more tightening, as well as Chairman Powell’s comments on the policy outlook, may increase volatility during American trading hours.
After reaching a weekly high over 1.0650 on Monday, the EUR/USD reversed course and finished in negative territory below 1.0600 on Tuesday. At the time of publication, the pair was trading sideways just over 1.0550.
According to New Zealand statistics, Employment Change dropped by 0.2% in the third quarter. This estimate came in lower than the market’s projection of a 0.4% gain after the second quarter’s 1% growth. Meanwhile, China’s Caixin Manufacturing PMI fell to 49.5 in October from 50.6 in September. Following these poor data reports, the New Zealand dollar/US dollar fell to around 0.5800.
After hitting resistance around 1.2200 on Tuesday, the GBP/USD fell and lost its daily gains. Early Wednesday, the pair was trading at approximately 1.2150.
On Tuesday, the USD/JPY touched its highest level in a year over 151.70 due to the Bank of Japan’s policy inactivity. During the Asian trading hours on Wednesday, Japan’s senior currency ambassador Masato Kanda expressed alarm about one-sided strong fluctuations in the foreign exchange markets and underlined that no action will be taken. Following this vocal intervention, the couple fell below 151.50 for the day.
On Tuesday, gold surpassed $2,000, but profit-taking appears to have precipitated a rapid plunge. XAU/USD was last spotted fluctuating at $1,980.
Please note that this article does not offer any instructions or suggestions regarding investment decisions. It is important for you to conduct your own research or seek professional advice from a qualified professional before conducting an investment decision.