EUR/USD: A Challenging Week for the Dollar
Throughout the week, the Dollar Index DXY, along with EUR/USD, experienced fluctuations in value. Initial data for Europe at the start of the week showed that the Eurozone’s GDP growth in the third quarter fell short of expectations at only 0.1%. Inflation also decreased, with October’s Consumer Price Index standing at 2.9%. The European Central Bank meeting on October 26 resulted in no changes to the interest rate. Market participants were awaiting the decision from the Federal Open Market Committee (FOMC) on November 1. Prior to the meeting, the dollar received support from heightened geopolitical tensions in the Middle East and positive macroeconomic data from the United States. However, the FOMC left the interest rate unchanged at 5.50% for the second consecutive month, disappointing dollar bulls. The Bureau of Labor Statistics data released on November 3 also revealed lower-than-expected non-farm payroll employment figures for October. As a result, the Dollar Index (DXY) decreased, and EUR/USD reached a six-week high. The publication of the ISM Services PMI index towards the end of the week showed slower business activity growth in the US services sector in October. The dollar continued its decline, ending the week at a lower level against the euro.
GBP/USD: A Positive Week for the Pound
The global trend of tightening monetary policy appeared to come to an end as central banks, including the Bank of England (BoE), left interest rates unchanged. The BoE’s decision to keep the key rate steady for the second consecutive time was perceived as hawkish, as three out of nine members voted for an increase. Governor Andrew Bailey emphasized that a rate cut would be premature and that monetary policy would remain restrictive for an extended period. The pound received bullish momentum after the release of US labor market data on November 3, and GBP/USD closed the week higher. Analysts predict a rise for the pair in the short term, with some expecting it to reach the 1.2450 level.
USD/JPY: A Mixed Week for the Yen
The Bank of Japan (BoJ) maintained its monetary policy parameters during its meeting on October 31. The interest rate remained unchanged, resulting in a middling week for the yen.
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