The dollar is broadly higher, global equities are in the green, and bond yields are lower as markets digest yesterday’s Fed meeting. The Fed met expectations of tapering its bond buying program but did not signal any rush to hike benchmark interest rates despite high inflation. The UK pound dropped 1% and to its lowest level in a month after the BoE surprised in keeping its benchmark rate unchanged, citing slowing growth over inflation concerns. Solid corporate earnings in Europe pushed equities to fresh record highs. Oil and gold are both higher. Happy Diwali 2021.
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November 4, 2021
EUR/USD 1.1555 GBP/USD 1.3528 USD/CAD 1.2423 AUD/USD 0.7406 USD/JPY 131.58 USD/CNH 6.3949 USD/ILS 3.1164 USD/MXN 20.5537 USD/CHF 0.9139 USD/INR 74.4563 USD/BRL 5.6003 USD/SGD 1.3513 USD/DKK 6.4373 USD/SEK 8.5703 USD/NOK 8.5302
The dollar is higher across the board, even as markets adjust to the slightly less hawkish Fed, and in light of the ECB, BOE, and BOJ all remaining in the dovish camp. Traders are now focused on tomorrow’s US jobs data.GBP
The Bank of England surprised markets by not hiking its benchmark rate as expected. Seven of the nine BOE voting members voted to keep rates steady, but the central bank said it would probably have to raise rates “over the coming months” if the economy performed as expected. The UK pound fell by nearly 1%, and is the worst performing G-10 currency overnight.EUR
The euro is nearly 0.5% lower, in line with the broadly stronger USD. ECB President Christine Lagarde said yesterday that the ECB was “very unlikely” to hike rates next year, emphasizing that high inflation is temporary, and mostly due to excessive post-pandemic demand.CAD
The Canadian dollar is weaker by 0.3% overnight amid a broadly stronger US dollar, and despite a rally in oil prices. OPEC meets today, and traders expect them to keep output steady, and not respond to pressure by President Biden to “pump more oil.” USD/CAD is trading near the middle of a 1.23-1.25 range in place since mid-October.ASIA/PACIFIC
The Japanese yen and Chinese yuan moved little overnight amid a lack of local economic news.
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