Forex Today: US Nonfarm Payrolls report to close a busy week

What you need to take care of on Friday, November 4:

The American Dollar extended its post-Fed rally and reached fresh weekly highs against most of its major rivals. Soaring government bond yields underpinned the greenback, as the yield on the 2-year Treasury note touched its highest level since 2007 at 2.74%.

The focus was on the Bank of England, which hiked its benchmark rate by 75 bps as anticipated. However, policymakers downwardly revised the growth forecast, anticipating the recession will continue well into the future. Policymakers now expect the UK economy to contract by 1% in 2024, compared to 0.25% in the previous meeting. Also,UK Prime Minister Rishi Sunak and Chancellor Jeremy Hunt are said to be planning tax hikes for roughly £40billion over the next 5 years.  The GBPUSD pair ended the day with sharp losses at around 1.1160.

Dollar’s rally stalled after the release of mixed US data, with investors particularly eyeing a tepid ISM Services PMI, which fell to 54.4 in October, worse than anticipated. Wall Street trimmed most of its intraday losses, although the three major indexes closed in the red.

The EURUSD pair hovers around 0.9750 after falling to 0.9729. Commodity-linked currencies extended their slides against the American dollar, with AUDUSD now hovering around 0.6300 and USDCAD trading at around 1.3740.

Gold flirted with the year’s low before bouncing now at around $1,630 a troy ounce. Crude oil prices eased, with WTI changing hands at $88.20 a barrel.

 On Friday, the US will release the October Nonfarm Payrolls report, with the country expected to have added 200K new jobs in the month. The Unemployment Rate is foreseen to tick higher from the current 3.5% to 3.6%.

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