Forex Today: Fear will continue to be the main market motor

FXStreet Team FXStreet

Here is what you need to know on Monday, November 2:

The greenback finished October with gains against most major rivals, backed by a sour market’s sentiment. Concerns related to the number of new coronavirus cases in Europe and the US, alongside uncertainty about the US presidential election, were behind the dismal mood.

The EUR/USD pair closed the week at November lows at 1.1640, as the ECB anticipated more stimulus coming in December, forecasting another economic setback in the last quarter of the year, as restrictive measures were announced in France, Germany, Spain and Italy, in an attempt to curb contagions.

The GBP held above 1.29 against the American currency but may start the week gapping lower, as UK Prime Minister Boris Johnson announced a nationwide one-month lockdown on Saturday, starting on November 2.

The Japanese yen strengthened against the greenback due to its safe-haven condition, given up some gains at the end of the week amid resurgent government bond yields. The yield on the benchmark 10-year Treasury note finished the week at 0.87%.

Equities remained under pressure, with Wall Street closing in the red on Friday. US indexes have their worst weekly performance since March.

Commodities also edged lower. Gold settled at $1,878 a troy ounce, while WTI finished at $35.70 a barrel.

Bitcoin Price Analysis: BTC/USD retreats after jumping to 33-month highs above $14,000

Author

FXStreet Team

FXStreet

Composed of a group of economic journalists and FX experts, the FXStreet content team produces and oversees all content published on FXStreet. It provides a purely journalistic approach to the Forex market.

AUD/USD meets fresh supply and tests 0.7100 amid weak Australian PMIs

AUD/USD has come under fresh selling pressure and is testing 0.7100 in the Asian session on Wednesday. Australia's flash PMIs showed manufacturing slipped into contraction and services expanding slowly for a second straight month, renewing the pair's downside. Furthermore, a bullish US Dollar acts as a headwind for the pair as traders keenly await the crucial Trump-Xi summit on Thursday. Meanwhile, markets shrug off US-Iran indirect talks.

USD/JPY stands firm near mid-157.00s, close to two-week high

USD/JPY hovers around mid-157.00s in the Asian session on Wednesday, near two-week highs touched last Friday as the BoJ's dovish rate hike continues to undermine the Japanese Yen. Meanwhile, the US Dollar remains firm amid the Fed's hawkish stance, adding support to the pair, though JPY intervention fears cap further gains. Markets pay little heed to the completion of the round of US-Iran indirect talks ahead of Trump-Xi meeting.

Gold: Bull-bear tug-of-war extends ahead of Trump-Xi meet

Gold has come under fresh selling pressure, struggling near $4,350 in Asia on Wednesday, retracing a part of the previous rebound from sub-$4,300 levels. Traders are refraining from placing fresh directional bets on the bullion ahead of the highly anticipated meeting between US President Donald Trump and his Chinese counterpart Xi Jinping due later in the day.

Bitcoin steadies after strong rally, Ethereum and XRP ease into consolidation

Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) bulls take a breather mid-week after gains of 6%, 4%, and 13% so far this week. BTC consolidates at $86,300, ETH hovers around $2,751, and XRP is at $1.57. The price action of these top three cryptocurrencies suggests bulls remain in control, although traders may have taken profits after the recent sharp rally.

AI capex enters the Fed's inflation case with October hike pricing past even money

AI capex enters the Fed's inflation case with October hike pricing past even money; UK headroom halved and French CDS at post-2020 wides before either budget lands; Pezeshkian in New York with a Gulf slot scheduled and no Iranian bilateral. Monday priced the same AI buildout at two completely different costs of capital.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.