What you need to know on Friday, October 29:
The dollar tumbled after two top-tier events, ending the day with a sharp decline in all currency markets. The preliminary estimate of the Gross Domestic Product for the third quarter rose a modest 2%, disappointing expectations. Wall Street rebounded from Wednesday’s slide as low growth points to a less aggressive financial tightening.
The European Central Bank kept its monetary policy unchanged as planned. The statement was practically a copy of the previous meeting, in which policymakers pledged to maintain financial support for as long as needed, repeating that inflation will soon regress from the current 13-year high.
Among other things, President Christine Lagarde said that the PEPP will likely end in March 2020, as originally planned, but added that no rate increases are expected during 2022. “What comes next, we will discuss in December,” she said. About inflation, she blamed high energy prices and supply chain problems, but those who were able to read between the lines noted that she and her universities are more concerned than they showed.
The nerves returned due to Brexit. France stopped a UK boat and another has been fined, amid a growing dispute over fishing rights. The British government summoned the French ambassador to clarify the situation.
The EUR / USD pair flirted with the 1.1700 level, now hovering in the 1.1680 price zone. GBP / USD found sellers around 1.3800, and Brexit headlines limited the advance.
Commodity currencies gained ground, with AUD / USD reaching its highest level since early July. CAD gains were tepid as oil prices remain low.
Gold struggled to break above the $ 1,800 level despite a weaker dollar overall, settling at $ 1,798 a troy ounce. The WTI ended the day at $ 82.80 a barrel.
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