What you need to know on Thursday, November 4:
The US dollar closed with modest losses on Wednesday against most of its main rivals, following the monetary policy announcement by the US Federal Reserve. The US central bank kept interest rates unchanged as expected and announced the reduction of its asset purchases by $ 15 billion per month. The Fed will begin to shrink later this month with cuts in purchases of Treasuries by $ 10 billion and mortgage-backed securities by $ 5 billion.
Additionally, lawmakers still think inflation will be “transitory,” although Powell noted that supply chain problems will likely extend into next year, meaning inflation will also remain high. Absolutely patient position with inflation higher than 2%. Among other things, he also said that he would not want to surprise the markets by changing the taper strategy, contrary to the statement that noted that they can adjust the strategy as needed.
His conservative stance put some pressure on the dollar while providing a boost to Wall Street, with all three major indices hitting all-time highs. Yields on US Treasuries advanced, and the yield on the 10-year Treasury settled at 1.60%.
EUR / USD is still unable to advance beyond 1.1615, while GBP / USD is trading close to 1.3700. AUD / USD rallied towards 0.7450, but risk is skewed to the downside amid a subdued RBA. The USD / CAD pair fell below 1.2400, despite weaker oil prices.
WTI closed around $ 80.00, down after US crude stocks rose more than expected, while gasoline inventories hit a four-year low. In addition, Iran’s nuclear talks will resume on November 29 in Vienna.
Gold tumbled ahead of the Fed’s decision, cutting some of its intraday losses before the close. It ended the day at around $ 1,770.00 a troy ounce.
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