FX Today: The Fed and the BoC are expected to lower their rates

In quite a volatile day, the US Dollar (USD) traded with modest losses, maintaining a gradual decline so far this week, always amid a steady market caution ahead of the Federal Reserve (Fed) event on Wednesday, where a 25-basis-point rate cut is fully priced in. In the same line, the Bank of Canada (BoC) is expected to lower its rate to 2.25% (from 2.50%).

Here's what to watch on Wednesday, October 29:

The US Dollar Index (DXY) remained caped by the 99.00 region amid a modest retracement in US Treasury yields across the curve prior to the FOMC gathering. That said, the Fed's interest rate decision will take centre stage, seconded by weekly MBA Mortgage Approvals prints, Pending Home Sales, and the weekly EIA's report on US crude oil inventories.

EUR/USD rose for the fifth consecutove day, managing to flirt with its provisional 100-day SMA around 1.1660-1.1670. 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, all due on October 30.

GBP/USD rapidly left behind Monday's optimism, refocusing on the downside and challenging recent lows near 1.3250. The BoE's Consumer Credit figures are expected alongside Mortgage Approvals, Mortgage Lending, M4 Money Supply and Net Lending to Individuals.

USD/JPY halted its multi-day positive streak, falling to multi-day lows near 151.70 after advancing to the 153.20 region on the previous day. Next on tap on the Japanese docket will be the Consumer Confidence gauge.

AUD/USD kept its constructive tone, building on Monday's uptick and trading closer to the key 0.6600 resistance zone, or three-week tops. The Inflation Rate and the Monthly CPI Indicator will take centre stage on the Australian calendar.

USD/CAD broke below its critical 200-day SMA to hit fresh three-week troughs on the back of the weaker Greenback and US-China trade hopes. The BoC is expected to reduce its policy rate by 25 basis points to 2.25%.

WTI resumed the decline and briefly pierced the key $60.00 mark per barrel as traders assessed the likelihood of further oil output hikes by the OPEC+.

Gold dropped further, reaching four-week lows near $3,870 per troy ounce on the back of persistent profit-taking and steady hopes of a US-China trade agreement. Silver prices regained the smile soon after plummeting to five-week troughs near $45.50 per ounce, ending the day just over the $47.00 yardstick.