XAU/USD Reacts to U.S. Economic Data Releases
The XAU/USD pair experienced a drop following the release of crucial U.S. economic data reports. The decline was notable, with XAU/USD finishing the session down by 1.56%. Let’s delve into the details:
PCE Price Index and NFP Reports
- The PCE Price Index, a key measure of inflation favored by the Federal Reserve, showed a 2.1% annual increase last month. This was slightly lower than the 2.3% rise in August but aligned with expectations.
- The upcoming Nonfarm Payrolls (NFP) report scheduled for today will be another significant economic release before the central bank’s policy meeting on 7 November.
- Despite the mixed economic data, market sentiment leans towards a 25 basis points interest rate cut by the Fed next week. However, political uncertainties in the U.S. are supporting gold prices.
Factors Impacting XAU/USD
- The possibility of another Donald Trump presidency has raised expectations for expansionary fiscal policies and higher tariffs, making gold an attractive hedge against long-term inflation risks.
- Geopolitical tensions in the Middle East and the conflict in Ukraine have further boosted gold’s appeal as a safe-haven asset.
Current Trading Situation
- XAU/USD has shown bullish momentum during Asian and early European trading hours, finding support in the $2,730–$2,740 range.
- Today’s NFP report release at 12:30 p.m. UTC may drive further movement in precious metals. Higher-than-expected data could lead to bearish pressure on XAU/USD, while lower figures may support gold prices.
EUR/USD Movement Amid Economic Indicators
The euro made gains against the U.S. dollar on Thursday as the USD weakened ahead of the U.S. presidential elections. Let’s explore the factors influencing EUR/USD:
Inflation and Rate Cut Expectations
- The easing U.S. price pressures indicated by the PCE Price Index report in September support expectations of a 25 basis points rate cut by the Federal Reserve next week.
- The HICP report showing inflation acceleration in October has added bearish pressure on the U.S. Dollar Index, supporting the euro.
Market Volatility and Rate Cut Speculations
- The upcoming U.S. presidential elections are viewed as a high-volatility event, prompting some investors to exit the market ahead of the results, impacting the DXY and favoring EUR/USD.
- While inflation acceleration may deter the ECB from rate cuts, market expectations still price in a 25-bps cut in December.
Effect of NFP Report on EUR/USD
- EUR/USD experienced a downtrend in Asian and early European sessions. Today’s NFP report at 12:30 p.m. UTC is anticipated to influence interest rate expectations and market sentiment, potentially leading to sharp price movements.
- External factors like the Boeing strike and hurricanes may impact the NFP report, affecting the market reaction in EUR/USD.
Bitcoin Correction Ahead of U.S. Election Results
Bitcoin underwent a correction after nearing recent highs, influenced by seasonality and the impending U.S. election results. Here’s a closer look at the situation:
Factors Driving Bitcoin Performance
- Seasonal trends and the U.S. election have played a significant role in Bitcoin’s recent rally, with investors closely monitoring the outcome for potential impacts on the crypto industry.
- Candidates’ promises regarding cryptocurrency regulation and support have created expectations for a more favorable regulatory environment in the coming year.
Market Expectations and NFP Influence
- The NFP report release today at 12:30 p.m. may affect Bitcoin’s price near the $69,000 support level. Positive figures could drive BTC/USD towards $71,000.
- Investors are closely watching the NFP data and its implications on market conditions, anticipating potential price movements in Bitcoin.