During the Asian session, the Reserve Bank of New Zealand (RBNZ) will report on inflation expectations for the fourth quarter. In Japan, data from the leading economic index will be published. Later, attention will turn to Fed Chairman Powell’s speech.
Here’s what you need to know on Wednesday, November 8:
The dollar retreated during the American session and lost momentum amid reversals in Treasury yields and as Wall Street stocks turned positive. The 10-year yield fell from 4.65% to 4.54%, while the 2-year yield fell from 4.95% to 4.89%. The Dollar Index rose for the second day in a row, but ended around 105.50 after hitting a two-day high of 105.77.
There will be no major U.S. reports on Wednesday. The key event will be the speech by Federal Reserve Chairman Jerome Powell. There seems to be little room for surprises. Fed officials agreed in their latest appearances that data will guide upcoming decisions. Although they do not rule out further tightening, it seems that the Fed has finished raising interest rates. However, the dollar’s decline remains limited and is exposed to a major correction, as fundamentals continue to favor the United States.
The EUR/USD pair bounced off 1.0670 and rose again to the 1.0700 area. The pair lost ground but maintained a bullish tone in the short term. On Wednesday, Germany will publish the latest consumer inflation reading, which is expected to come with no surprises, and the Eurozone will report retail sales for September.
The Pound lagged on Tuesday. The Bank of England’s outlook remains subdued following last week’s policy meeting. The GBP/USD pair retreated for the second day in a row and bottomed at 1.2262 before bouncing to 1.2300.
USD/JPY rose for the second day in a row, despite reversals in US Treasury yields, and tested levels above 150.50. The pair remains bullish in the short term, but is losing momentum.
The Australian dollar was one of the worst performing currencies on Tuesday, despite the Reserve Bank of Australia’s (RBA) rate hike. The central bank’s dovish tone weighed on the Australian dollar. The AUD/USD pair found support at the 0.6400 area and rose to 0.6430, boosted by the decline in the Dollar during the American session.
TD Valores Bursátiles analysts give their opinion on the AUD/USD:
In the short term, we see the AUD returning to the $0.63-$0.65 area. However, longer term we are bullish on AUD given our view that the USD correction has begun while Chinese stimulus should start to bear fruit.
The NZD/USD pair retreated again from 0.6000 and bottomed at 0.5908 before turning higher and reaching 0.5940. On Wednesday, the Reserve Bank of New Zealand (RBNZ) will report on inflation expectations.
Metals remained under pressure. Silver is trading dangerously below $22.80 and hit two-week lows of $22.43. Gold fell to a two-week low of $1,956 before paring losses.
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Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
