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Forex Today: Dollar depressed after the Fed, trade talks accelerate, and another busy data day awaits

Here is what you need to know on Thursday, October 31:

  • The US Dollar remains on the back foot after the Federal Reserve's decision. The Fed cut rates and signaled a pause in the short term. While the bank is unlikely to reduce rates again in the next few months, Chair Jerome Powell set an even higher bar for raising rates, requiring a substantial rise in inflation. Markets continue to digest the decision.
  • US data: The bank's decision came after the US reported a marginal slowdown in growth, to 1.9% annualized in the third quarter. The gap between upbeat consumption and weak manufacturing and investment was sustained (see analysis). ADP's jobs report met expectations at 125,000 private-sector positions gained in October, maintaining expectations for Friday's Non-Farm Payrolls. See US Non-Farm Payrolls Preview: The trend remains the same
    The US releases Core Personal Consumption Expenditure (Core PCE) – the Fed's preferred inflation figure, alongside Personal Spending and Personal Income. 
  • Trade: The Chinese media has reported that negotiations with the US are advancing. Top officials will hold a telephone call on Friday. Beijing may also remove some extra tariffs on US agricultural products to help importers achieve the $50 billion target. Presidents Donald Trump and Xi Jinping may find another spot for a summit after Chile canceled the APEC Summit in mid-November. 
  • China: The official Chinese Purchasing Managers' Index for the manufacturing sector missed with 49.3 points, showing an ongoing contraction.
  • The Bank of Japan has left its interest rate unchanged but strengthened its forward guidance, abandoning the time frame for keeping low rates. The dovish move opens the door to rate cuts. 
  • Euro-zone: The 19-country currency bloc publishes initial Gross Domestic Product figures for the third quarter and preliminary inflation figures for October. Both are set to show a slowdown. Initial GDP figures from France have not altered early expectations. See Euro-zone GDP and inflation preview: Dual slowdown set to depress EUR/USD
  • Canada: The Bank of Canada left interest rates unchanged but said it would be hard to sustain the positive trends amid global headwinds. While a rate cut is not imminent, the Canadian Dollar lost ground. GDP figures for August are expected to show a pickup in economic expansion.
  • UK: Opinion polls continue showing a lead for Prime Minister Boris Johnson's Conservatives. The ruling party may receive a boost if Nigel Farage's Brexit Party decides to withdraw candidates and facilitate Tories' victories in several marginal seats. GBP/USD is rising.
  • Cryptocurrencies are stable, with Ripple's XRP standing out with holding its gains close to $0.30. 
     

Author

Yohay Elam

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

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