November 4, 2021

Calm Currency Markets Await FOMC 'Big Wave'

 The king of the US dollar continued to move calmly ahead of the publication of US private sector ADP jobs data and the announcement of FOMC policy that will rock the market during the New York session.

Against most major currencies, the dollar index traded hovering around 94.00 during the European session.

The Federal Reserve (Fed) is expected to announce a reduction in its monthly asset purchase program worth $ 120 billion.

Investors will focus on indicators of interest rate hikes or Chairman Jerome Powell’s latest views on current inflation levels.

Prior to that, the release of ADP employment data will be given prior attention as an indication of the NFP report to be published on Friday.

Following the development of the European currency, the pound moved weakly around a three -week low against the US dollar following investor vigilance awaiting the FOMC and Bank of England (BOE) policy meeting.

While the market widely expects the BOE to announce a rate hike on Thursday, there is also uncertainty that the central bank will delay it.

The euro rose slightly, but still traded around one -week lows against the USD.

Meanwhile, the kiwi dollar registered a modest increase after the latest jobs report showed New Zealand’s unemployment rate fell to its lowest level in 14 years in the third quarter.

This has given support for the currency to rise amid investor vigilance. The Aussie dollar continued to weaken following disappointment from the dovish decision of the Australian Central Bank (RBA) on Tuesday.