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 hangs near three-week low, below 0.6950 as traders await US NFP report

AUD/USD hits a three-week low during the Asian session on Friday as the RBA’s dovish shift and a rout in equity markets weigh on the risk-sensitive Aussie. However, the recent slump in US bond yields to a two-month low keeps US Dollar bulls on the back foot and limits losses for the currency pair as traders look to the US NFP report for a fresh impetus.

USD/JPY bounces off three-week low; keeps the red near 157.65 as focus remains on US NFP

USD/JPY bounces off the weekly low set during the Asian session, as bears turn cautious ahead of the US NFP report due later this Friday. The upside seems limited as the recent slump in US bond yields and hopes of Iran war de-escalation undermine the US Dollar. Moreover, a hawkish BoJ and intervention risks support the Japanese Yen, capping the pair.

Gold loses the grip; $4,000 comes next on the downside

Gold sets aside two daily advances in a row on Friday, opening the door to a potential test of the key $4,000 mark per troy ounce. The precious metal’s retracement follows a decent improvement in the sentiment surrounding the US Dollar, solid NFP data and higher US Treasury yields across the board.

Democrats win House and Senate in US midterms: Why isn’t all bad news for crypto

The biggest story this week was Tuesday’s US midterm elections, which saw Democrats win control of both the House and the Senate in a clear blue wave. This political shift in the US has triggered sharp price swings across the cryptocurrency market.

Week ahead – Inflation and geopolitics in focus as US political landscape shifts

Post-midterm election euphoria fizzles out as risk aversion prevails. US CPI, PPI and Fedspeak on the radar as Fed hike bets remain supported. Oil retreat pauses on mixed hopes about the ongoing conflicts.

US Dollar breaks below 101.50 as Democrats sweep Congress

The US Dollar (USD) comes under heavy selling pressure on Wednesday, with the US Dollar Index (DXY) falling around 0.5% to trade near 101.35 after sliding below the 101.50 level. The Greenback retreats to its lowest level in four weeks as investors reassess the political and economic outlook following the Democratic Party's sweeping victory in the United States (US) midterm elections.