What you need to know on Wednesday, November 3:
The greenbacks strengthened against most of its major rivals, only stable against those considered safe-havens. The AUD and the GBP were the worst performers, the first hit by a dovish Reserve Bank of Australia, the second hit by Brexit jitters and uncertainty related to the Bank of England, scheduled to meet this week. AUD/USD trades around 0.7420 while GBP/USD hovers near 1.3600.
The EUR/USD pair is trading around 1.1580, with demand for the shared currency undermined by Markit´s final readings of its October Manufacturing PMIs. The German index was downwardly revised to 57.8 from 58.2, while that for the Union was confirmed at 58.3, below the preliminary estimate of 58.5. According to the official report, “supply bottlenecks remained a major hindrance to Germany's manufacturers at the start of the fourth quarter.”
Commodities shed some ground but held within familiar levels. Spot gold settled at $1,787 a troy ounce while WTI trades around $83.60 a barrel.
Japanese markets will be closed amid a local holiday on Wednesday, most likely exacerbating range trading ahead of the US Federal Reserve monetary policy announcement. Market participants anticipate US policymakers will decide to reduce the monthly purchases of Treasuries and mortgage-backed securities by $15 billion per month, to finalize it mid-2022. If the Fed announces a larger monthly reduction of facilities, the dollar may reach fresh 2021 highs vs the common currency.
Wall Street advanced, with the DJIA and the S&P closing at record levels. The Nasdaq also edged higher, while government bond yields ticked lower.
Market participants are taking off some of their bets on soon-to-come rate hikes within major economies.
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