- Dollar loses sharply and trims gains across the market.
- WSJ: Fed ready to raise 75 bps, and discuss size of upcoming hikes.
- EUR/USD bounces up more than 50 pips from lows.
The EUR/USD went from a one-week low just above 0.9700 to higher above 0.9750, driving by a general decline in the dollar in the market. The dollar’s pullback came after a Wall Street Journal article suggested that the Federal Reserve will consider the size of future interest rate hikes at the next meeting.
The dollar index fell towards 113.00, although it later recovered positions again. Something similar happened with Treasury bond yields, which fell to their lowest in days but are already on the rise again.
A note from the WSJ generated the aforementioned volatility. In it it is stated that the Federal Reserve is ready to raise by 75 basis points at the next meeting (November 1 and 2), and that will consider in the same on the magnitude of the next rises. In the latter is the novelty, since there would be a debate between those who want a reduction in the rate of rises and others who are concerned that inflation is not going down.
Despite these latest movements, the EUR/USD remains sideways and once again aims to end the week in the area around 0.9750. If it gains momentum and recovers levels above 0.9810, momentum could lead to a test of weekly highs around 0.9880. While in the opposite direction, below 0.9720 negative pressures could intensify again.
Technical levels
Source: Fx Street
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