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Forex Today: Dollar’s selling spiral may continue on Friday

What you need to know on Friday, October 29:

 The dollar tumbled after two first-tier events, ending the day sharply lower across the FX board. The preliminary estimate of Q3 Gross Domestic Product was up a modest 2%, missing expectations. Wall Street recovered from Wednesday’s slump, as poor growth hints at less aggressive financial tightening.

 The European Central Bank left its monetary policy unchanged as anticipated. The statement was pretty much a copy of the previous meeting, with policymakers pledging to maintain financial support for as long as needed and repeating that inflation will soon recede from the current 13-year high.

Among other things, President Christine Lagarde said that the PEPP will likely end on March 2020, as originally planned, but added that no rate hikes are to be expected throughout 2022. “What comes next, we will discuss in December,” she said. About inflation, she blamed it on higher energy prices and supply chain issues, but those able to read between lines noted that she and her colleges are more concerned than what they showed.

Brexit jitters returned. France detained a UK boat and another has been fined, amid an escalating row over fishing rights. The British government summoned France's ambassador to clarify the situation.

The EUR/USD pair flirted with the 1.1700 level, now hovering in the 1.1680 price zone. GBP/USD met sellers around 1.3800, with Brexit headlines capping the advance.

Commodity-currencies gained traction, with AUD/USD reaching its highest since early July. CAD gains were tepid, as oil prices remain subdued.

Gold struggled to overcome the 1,800 level despite the broad dollar’s weakness, settling at $1,798 a troy ounce. WTI ended the day at $82.80 a barrel.

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Valeria Bednarik

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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