Select Language

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

Breaking news

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

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2024.11.08 16:11
Forex Today: Markets stabilize, investors assess Fed announcements in aftermath of Trump victory

update 2024.11.08 16:11

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.

US Dollar PRICE This week

The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Swiss Franc.

  USD EUR GBP JPY CAD AUD NZD CHF
USD   0.54% -0.38% 0.43% -0.28% -1.37% -0.43% 0.64%
EUR -0.54%   -0.95% -0.54% -1.20% -1.60% -1.35% -0.30%
GBP 0.38% 0.95%   0.16% -0.27% -0.65% -0.39% 0.65%
JPY -0.43% 0.54% -0.16%   -0.71% -1.25% -0.64% 0.52%
CAD 0.28% 1.20% 0.27% 0.71%   -0.89% -0.15% 0.92%
AUD 1.37% 1.60% 0.65% 1.25% 0.89%   0.26% 1.31%
NZD 0.43% 1.35% 0.39% 0.64% 0.15% -0.26%   1.05%
CHF -0.64% 0.30% -0.65% -0.52% -0.92% -1.31% -1.05%  

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

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.

Central banks FAQs

Central Banks have a key mandate which is making sure that there is price stability in a country or region. Economies are constantly facing inflation or deflation when prices for certain goods and services are fluctuating. Constant rising prices for the same goods means inflation, constant lowered prices for the same goods means deflation. It is the task of the central bank to keep the demand in line by tweaking its policy rate. For the biggest central banks like the US Federal Reserve (Fed), the European Central Bank (ECB) or the Bank of England (BoE), the mandate is to keep inflation close to 2%.

A central bank has one important tool at its disposal to get inflation higher or lower, and that is by tweaking its benchmark policy rate, commonly known as interest rate. On pre-communicated moments, the central bank will issue a statement with its policy rate and provide additional reasoning on why it is either remaining or changing (cutting or hiking) it. Local banks will adjust their savings and lending rates accordingly, which in turn will make it either harder or easier for people to earn on their savings or for companies to take out loans and make investments in their businesses. When the central bank hikes interest rates substantially, this is called monetary tightening. When it is cutting its benchmark rate, it is called monetary easing.

A central bank is often politically independent. Members of the central bank policy board are passing through a series of panels and hearings before being appointed to a policy board seat. Each member in that board often has a certain conviction on how the central bank should control inflation and the subsequent monetary policy. Members that want a very loose monetary policy, with low rates and cheap lending, to boost the economy substantially while being content to see inflation slightly above 2%, are called 'doves'. Members that rather want to see higher rates to reward savings and want to keep a lit on inflation at all time are called 'hawks' and will not rest until inflation is at or just below 2%.

Normally, there is a chairman or president who leads each meeting, needs to create a consensus between the hawks or doves and has his or her final say when it would come down to a vote split to avoid a 50-50 tie on whether the current policy should be adjusted. The chairman will deliver speeches which often can be followed live, where the current monetary stance and outlook is being communicated. A central bank will try to push forward its monetary policy without triggering violent swings in rates, equities, or its currency. All members of the central bank will channel their stance toward the markets in advance of a policy meeting event. A few days before a policy meeting takes place until the new policy has been communicated, members are forbidden to talk publicly. This is called the blackout period.

 


Date

Created

 : 2024.11.08

Update

Last updated

 : 2024.11.08

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Most viewed

NZD/JPY Price Analysis: Pair tumbles and eyes break of 90.00-92.00 range

The NZD/JPY pair has been on a downward trajectory for the past three days, shedding 0.27% on Friday's session to close near the 90.30 level.
New
update2024.11.23 06:57

Silver Price Forecast: XAG/USD surges above $31.00 as US yields fall

Silver price recovered some ground on Friday and reclaimed the $31.00 a troy ounce, boosted by falling US Treasury bond yields and despite a firm US Dollar.
New
update2024.11.23 06:31

NZD/USD Price Analysis: Pair fell to lowest level since November, bears command

The NZD/USD pair extended its losses on Friday, declining by 0.54% to 0.5830, its lowest level since early November.
New
update2024.11.23 06:18

Canadian Dollar loses momentum on Friday

The Canadian Dollar (CAD) waffled into the midrange on Friday, testing into the low side but ultimately getting hamstrung as Canadian data comes in mixed and gets overshadowed by sentiment-bolstering US data prints.
New
update2024.11.23 05:47

Australian Dollar retreats as US Dollar gains momentum after S&P PMI data

The AUD/USD declined just below 0.6500 as the market is focused on the US Dollar's strength.
New
update2024.11.23 05:07

Gold price reaches two-week peak as US yields fall, geopolitical tensions rise

Gold price rallies to a new two-week high on Friday during the North American session as US Treasury bond yields drop.
New
update2024.11.23 04:55

Dow Jones Industrial Average soars another 350 points

The Dow Jones Industrial Average (DJIA) has snapped its recent soft patch, extending its midweek bullish pivot into a firm Friday performance.
New
update2024.11.23 03:56

US Dollar retraces from two-year high after PMI data, geopolitical uncertainty prevails

In Friday's session, the US Dollar Index (DXY) declined slightly after reaching a new two-year high amidst geopolitical instability.
New
update2024.11.23 03:08

Mexican Peso slumps, shrugging off solid data

The Mexican Peso retreats for the third straight day versus the US Dollar, although economic data suggests the country's economy grew in the third quarter while inflation edged lower.
New
update2024.11.23 02:37

A (local) peak in Gold is now imminent - TDS

The downturn in Gold prices underscored by sharp liquidations from macro funds lined up exceptionally well with historical patterns surrounding drawdowns associated with macro fund liquidations from extreme levels, averaging between 7-10% over the last decade, TDS' Senior Commodity Strategist Daniel Ghali notes.
New
update2024.11.23 01:02

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Cancel