Forex Today: Markets stabilize, investors assess Fed announcements in aftermath of Trump victory

Here is what you need to know on Friday, November 8:

Following two days of highly volatile action, financial markets stay relatively quiet early Friday as investors digest the Federal Reserve's (Fed) policy announcements following Donald Trump's victory in the presidential election. The US economic calendar will feature the University of Michigan's flash estimate of the Consumer Sentiment Index for November.

The Fed lowered the policy rate by 25 basis points to the range of 4.5%-4.75% following the November policy meeting, as expected. In its policy statement, the Fed noted that risks to the job market and inflation were "roughly in balance," echoing language from its September statement. In the post-meeting press conference, Fed Chairman Jerome Powell refrained from hinting on a possible policy action in December and said that the results of the presidential election will have no effect on the monetary policy in the near term. 

Following Wednesday's rally, the US Dollar (USD) Index lost 0.7% on Thursday and erased a portion of its weekly gains. The USD Index holds steady near 104.50 in the European morning on Friday. In the meantime, US stock index futures trade flat, while the benchmark 10-year US Treasury bond yield fluctuates above 4.3%.

EUR/USD staged a rebound and closed in positive territory on Thursday. The pair, however, lost its traction after failing to stabilize above 1.0800 and was last seen trading in the red near 1.0770.

The Bank of England (BoE) announced on Thursday that it cut the bank rate by 25 basis points to 4.75%. In its policy statement, the BoE noted that it revised its forecast for the Consumer Price Index inflation in one year's time to 2.7% from 2.4% in August's projections, adding that the new budget is provisionally expected to boost inflation by just under 0.5 percentage points at peak between mid 2026 and early 2027. GBP/USD gathered bullish momentum following the BoE event and gained about 0.8% on the day. In the early European session on Friday, the pair trades in a narrow range below 1.3000.

USD/CAD edges higher toward 1.3900 after losing more than 0.5% on Thursday. Statistics Canada will release labor market data for October later in the session.

After reaching a multi-month high above 154.50 midweek, USD/JPY corrected sharply on Thursday and lost more than 1% on the day. The pair stays on the back foot early Friday and trades below 153.00.

Gold rebounded following Wednesday's sharp decline, rising nearly 1.8% on Thursday. XAU/USD, however, started to edge lower and was last seen trading below $2,700 in the European morning on Friday.