FX Today: A steady hand is anticipated from the BoJ and the ECB

The US Dollar (USD) sharply reversed its recent weakness as market participants assessed the widely anticipated rate reduction by the Federal Reserve (Fed), while hopes of a US-China trade deal continued to do the rounds in the background.

Here’s what to watch on Thursday, October 30:

The US Dollar Index (DXY) rose to two-week highs, well north of the 99.00 barrier, helped by the strong bounce in US Treasury yields and Chair Jerome Powell’s message after the Fed delivered a rate cut. Fed’s Bowman and Logan are due to speak.

EUR/USD halted its positive streak and slipped back to the 1.1580 zone, or two-week lows. Next of note on the domestic calendar will be the ECB’s interest rate decision and the release of Germany’s flash CPI, advanced Q3 GDP Growth Rate, and the labour market report. On the broader Euroland, the flash Q3 GDP Growth Rate is also due alongside the final Consumer Confidence gauge, the Unemployment Rate and the Economic Sentiment.

GBP/USD retreated to multi-month lows near 1.3140 following the pronounced rebound in the Greenback and bets of a BoE rate cut. The Nationwide Housing Prices are next on tap on the UK calendar on October 31.

USD/JPY resumed its recent uptrend, briefly piercing the 153.00 hurdle and reversing Tuesday’s retracement. The BoJ is expected to leave its policy rate unchanged, while the weekly Foreign Bond Investment figures will also be on the docket.

AUD/USD gave away part of its recent uptick past the 0.6600 barrier following the late uptick in the US Dollar. Australia’s Export and Import Prices are due next.

WTI clinched marginal gains, revisiting the $61.00 mark per barrel, as traders remained watchful of developments on the trade front, while a larger-than-expected drop in US crude oil inventories added to the sentiment.

Gold extended its decline for the fourth day in a row following the stronger Greenback, higher US yields, and diminishing bets of a Fed rate cut in December. Silver prices added to Tuesday’s recovery, retaking the $48.00 mark per ounce and beyond.