Market Drivers – US Session 03/11/2022

Mohamed Abdelhamid 4 November, 2022 3:15 am Forex Market, Market Update

The markets focused on the Bank of England on Thursday. BoE hiked its benchmark rate by 75 bps as expected. However, policymakers downwardly revised the growth forecast, anticipating the recession will continue into the future.

The EURUSD pair hovers around 0.9750 after falling to 0.9729. Commodity-linked currencies extended their slides against the American dollar, with AUDUSD now hovering around 0.6300 and USDCAD trading at around 1.3740.

Gold flirted with the year’s low before bouncing now at around $1,630 a troy ounce. Crude oil prices eased, with WTI changing hands at $88.20 a barrel.

Other Developments

Policymakers now expect the UK economy to contract by 1% in 2024, compared to 0.25% in the previous meeting. Prime Minister Rishi Sunak and finance minister Jeremy Hunt have plans for tax hikes for roughly £40billion over the next 5 years. The GBPUSD pair ended the day with sharp losses at around 1.1160.

On Friday, the US will release the October Nonfarm Payrolls report, with the country expected to have added 200K new jobs in the month. The Unemployment Rate is foreseen to tick higher from the current 3.5% to 3.6%.

The American Dollar extended its post-Fed rally and reached fresh weekly highs against most of its major rivals. Soaring US bond yields underpinned the dollar, as the yield on the 2-year Treasury note touched its highest level since 2007 at 2.74%.

Economic Data

The US dollar’s rally stalled after the release of mixed US data, with investors particularly eyeing a tepid ISM Services PMI, which fell to 54.4 in October, worse than anticipated. Wall Street trimmed most of its intraday losses, although the three major indexes closed in the red.

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