The US Dollar Slips
London: 2 November 2023 (TraderMade): The US dollar saw a broad decline on Thursday as traders reacted to the possibility of US interest rates hitting their peak. This reaction followed the Federal Reserve's decision to keep rates on hold, sparking optimism in the market.
Latest update on significant pairs
Investor attention is now shifting to the Bank of England, with the British pound edging up by 0.11%. GBPUSD closed yesterday at 1.2153, and by about 8:30 AM GMT, the pair was at 1.2166, in anticipation of the bank maintaining high rates.
Similarly, EURUSD closed yesterday at 1.05684, and today, it was at 1.05974, showing a 0.27% increase.
AUDUSD closed yesterday at 0.63992, and is at 0.64308 today. Thus, it shows a 0.49% increase.
Federal Reserve Chair Jerome Powell left room for another rate hike but noted that the risks of doing too much or too little were now balanced, with the funds rate target at a 22-year high of 5.5%.
Traders gained confidence in the idea that US rates may have peaked after data revealed a sharp contraction in US manufacturing in October, although a robust labour market suggests the Fed will keep rates elevated for an extended period.
As markets anticipate the Bank of England's decision, nearly 90% of investors expect rates to remain at a 15-year high, with no rate cuts expected until September 2024, well after cuts are expected on the continent.
