This is what you need to know to trade today Thursday, November 4:
The dollar moved sharply in both directions during FOMC Chairman Jerome Powell’s press conference, ending the day modestly lower against its main rivals on Wednesday. Before the Bank of England (BoE) interest rate decision, markets remain relatively quiet and the US dollar appears to have regained its strength. The European Commission will publish updated economic forecasts for the euro zone. Weekly data for initial jobless claims, Q3 unit labor costs and trade balance data for September will be released during the US economic calendar.
As expected, the Federal Reserve The US decided to reduce its asset purchases by $ 15 billion a month, starting in mid-November. In its monetary policy statement, the Fed adopted a flexible tone, stating that it is willing to adjust the pace of purchases in the coming months if justified by changes in the economic outlook. As to the prospects for rates, Powell reiterated that a rate hike will not necessarily follow immediately when the quantitative easing program ends. The president said they believe inflation it will begin to ease towards 2% in the second half of 2022 and emphasized that they have a lot of ground to cover with respect to their employment goal.
Meanwhile, data from the United States showed that private sector employment increased more than expected in October and economic activity in the services sector expanded at its strongest pace on record, with the ISM services PMI jumping to 66.7 points. from September 61.9.
The Fed’s announcement had little to no impact on market sentiment and the S&P 500 Index once again hit a new all-time high. The yield on 10-year US Treasuries rose more than 3% on Wednesday and now remains above 1.6%, alleviating concerns about the flattening of the yield curve. Japan’s Shanghai Composite and Nikkei 225 indices are up 0.7% and 0.8%, respectively, reflecting upbeat market sentiment.
The EUR/USD It rose above 1.1600 at the end of the American session on Wednesday, but appears to have lost its momentum. Several policy makers at the European Central Bank said on Wednesday there was no reason to raise rates next year. Data from Germany showed that factory orders rose 9.7% year-on-year in September.
The GBP/USD It lost its traction after rising to 1.3700 on Wednesday and now remains in negative territory as it awaits monetary policy announcements from the BoE. The central bank could opt for a 15 basis point rate hike to ease price pressures. A larger rate hike is likely to provide a boost to the GBP, while not raising rates could trigger another downward movement in the pair. Governor Andrew Bailey’s comments on the rate outlook may also add to volatility later in the session.
See: BoE Preview: Guide to Trading the Critical Super Thursday with GBP / USD, in Three Steps
See: BoE preview: Will rates go up or not? Is GBP / USD ready to fall?
The oro it fell to its lowest level in more than two weeks below $ 1,760 before entering a consolidation phase. XAU / USD is making small daily gains around $ 1,770 at the start of the European session, but looks fragile after Wednesday’s slide.
Cryptocurrencies: Bitcoin is struggling to find direction and continues to fluctuate above $ 60,000. Ethereum hit a new all-time high above $ 4,600 on Wednesday and appears to have entered a consolidation phase around $ 4,500.
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