In this article, we have covered the highlights of global market news about the EUR/USD, GBP/USD, NZD/USD and AUD/USD.
EUR/USD will conclude the year at 0.95 and remain there until the beginning of 2023 – BofA
Bank of America Global Research economists anticipates that the FOMC policy decision will strengthen the US currency. As a result, they predict that by the end of the year, EUR/USD will be at 0.95.
Fed’s pledge to maintain its support for the USD “We anticipate the Fed to increase its federal funds rate target range by 75 basis points to 3.75–4.0% in November. In our opinion, the decision on the November policy rate is unrelated to the November FOC meeting. The discussion during the meeting is on what to anticipate in December and beyond and future policy rate guidance.
“By referencing the discussion in his news conference, Chair Powell will likely hint at the possibility of a downshift in December. He’ll probably retain optionality by reiterating that the Fed will continue to be data-dependent and that no decision has been taken.
We anticipate that the Federal Reserve’s statement will strengthen the USD in the foreseeable future.
GBP/USD currently seems to be near-term consolidating – UOB
According to Markets Strategist Quek Ser Leang and Economist Lee Sue Ann of UOB Group, GBP/USD is trading between the 1.1330-1.1635 band.
“Our estimate for GBP to continue declining yesterday was inaccurate as it jumped to 1.1566, fell to 1.1437, and then bounced back to finish at 1.1485 (+0.16%), contrary to what we had anticipated.” There has been a mixed view due to the abrupt but brief fluctuations. The GBP exchange rate may fluctuate, most likely between 1.1430 and 1.1550.
Within the next three weeks: “We maintain the same outlook as yesterday (01 November, spot at 1.1470), where GBP looks to have entered a consolidation phase and is expected to trade between 1.1330 and 1.1635 for the time being.”
NZD/USD maintains intraday gains but sits below a multi-week high ahead of the FOMC meeting.
On Wednesday, the NZD/USD pair experiences modest growth for the third day. It keeps an upbeat tone throughout the early European session. The pair is now trading in the range of 0.5870-0.5875. However, this is still below the level it reached on September 21, the day before.
The mainly positive domestic employment data, which revealed that the unemployment rate remained stable during the third quarter, close to the record low level of 3.3%, provides some support for the New Zealand dollar. Additionally, against estimates for a 0.5% rise, employed individuals increased by 1.3% during the given period. This is seen as a tailwind for the NZD/USD pair, combined with the advent of new selling surrounding the US dollar.
A major reason for keeping the dollar down is speculation that the Federal Reserve may take a less aggressive attitude amid evidence of a downturn in the US economy. The US ISM manufacturing business survey results, which indicated that the Prices Paid Index shrank for the first time since May 2020, confirmed the projections. This suggests that inflationary pressures are diminishing and may prompt the Fed to decrease the rate at which it raises rates.
As a result, attention will be fixed on the results of the two-day FOMC monetary policy meeting, which are expected to be released later during the US session. For the fourth time in many meetings, the US central bank is anticipated to deliver another supersized 75 bps rate increase. Investors, meanwhile, will carefully examine the accompanying policy statement and remarks made by Fed Chair Jerome Powell at the press conference after the meeting for hints about potential rate rises in the future.
AUD/USD Price Analysis: Extends rally off 100-EMA towards 0.6455 barrier combination
Ahead of Wednesday’s European session, the AUD/USD remains higher at the intraday high of 0.6427. By doing so, the Aussie pair extends its most recent recovery from the 100-EMA towards the resistance line that has been in place for a week.
The RSI (14) is close to 50, and the MACD is about to make a bull cross. Thus the AUD/USD rebound is expected to continue. The pair’s movements are nonetheless constrained by the monthly symmetrical triangle between 0.6345 and 0.6500.
But the fast rebound of the quotation is prevented by a confluence of the weekly resistance line and the 38.2% Fibonacci retracement of the pair’s decline from September to October, close to 0.6455.
It’s essential to remember that the bulls require a confirmation from the 50% Fibonacci retracement level at 0.6545 for the AUD/USD pair’s rise over 0.6500.
A run-up towards the most recent September swing high at 0.6750 might be anticipated after that.
On the other hand, a clear breach of the 100-EMA support, which is now at 0.6390 as of press time, might swiftly point sellers of the AUD/USD pair towards the triangle’s support area near 0.6345.
Please click here for the Market News Updates from 1 November, 2022.