This is what you need to know to trade today Thursday October 27:
After falling 1% for the second day in a row on Wednesday, the DXY dollar index remains relatively calm below 110.00 early on Thursday as investors await the first estimate of dollar growth. Gross Domestic Product for the third quarter from the US Bureau of Economic Analysis. Even more importart, the European Central Bank (ECB) will announce its decision on interest rates and its president, Christine Lagarde, will deliver his speech on political prospects at a press conference. Durable Goods Orders for September and weekly figures for initial jobless claims will also be released on the US economic docket.
See: US Q3 GDP Preview: Dollar Bears Will Retain Control on Weak GDP
On Wednesday, the Bank of Canada (BoC) raised its interest rate by 50 basis points (bp), compared to market expectations of a rise of 75 bp. Commenting on the decision, BoC Governor Tiff Macklem noted that were nearing the end of the hardening phase, but added that they weren’t there yet. In turn, global bond yields fell and the dollar came under further selling pressure, with the benchmark 10-year yield falling below 4%. Despite the BoC’s dovish tone, the USD/CAD fell to a fresh two-week low at 1.3507, but managed to recover towards 1.3600 early on Thursday.
See: European Central Bank forecast: Little chance of President Lagarde launching an aggressive message
The ECB is expected to raise its interest rates by 75 basis points and announce that further rate hikes will be necessary, as inflation in the euro zone remains uncomfortable. The pair EUR/USD reached its highest level since mid-September, at 1.0093, before entering a consolidation phase.
See: ECB Preview: Lagarde to Hit Euro Moderately High, Four Reasons to Expect EUR/USD to Fall
The GBP/USD took advantage of the general weakness of the dollar and gained almost 150 pips on Wednesday. At time of writing, the pair is trading slightly lower around 1.1600. According to The Telegraph, the British Prime Minister, Rishi Sunak, is reconsidering tax hikes and the big public spending cuts in his fiscal plan.
The USD/JPY fell for the second day in a row on Wednesday and extended its decline towards 145.00 during the Asian session on Thursday. Japanese Finance Minister Shunichi Suzuki announced earlier in the day that they will decide on a fiscal stimulus package on Friday.
Driven by falling global bond yields, the Prayed gained ground and reached its highest level since October 13, at $1,675. Cautious market sentiment does not allow XAU/USD to maintain its bullish momentum on Thursday and is now trading in negative territory near $1,660.
The Bitcoin It was up nearly 4% on Wednesday and broke above the key $20,000 level. At the time of writing, BTC/USD was consolidating its gains at $20,700. The ethereum it gained bullish momentum and jumped above $1,500, gaining almost 8% on Wednesday.
Source: Fx Street
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