Financial Markets Update: November 8

Market Overview

After recent volatility, financial markets are relatively calm as investors digest the Federal Reserve’s policy decisions post-Trump’s election victory. The University of Michigan’s Consumer Sentiment Index for November will be in focus today.

US Dollar Performance This Week

US Dollar (USD) against Major Currencies

• USD was strongest against the Swiss Franc this week.
• Check out the table below for percentage changes of USD against major currencies.

  | | USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF |
  |——-|——–|——–|——–|——–|——–|——–|——–|——–|
  | USD | | +0.54% | -0.38% | +0.43% | -0.28% | -1.37% | -0.43% | +0.64% |
  | EUR | -0.54% | | -0.95% | -0.54% | -1.20% | -1.60% | -1.35% | -0.30% |
  | GBP | +0.38% | +0.95% | | +0.16% | -0.27% | -0.65% | -0.39% | +0.65% |
  | JPY | -0.43% | +0.54% | -0.16% | | -0.71% | -1.25% | -0.64% | +0.52% |
  | CAD | +0.28% | +1.20% | +0.27% | +0.71% | | -0.89% | -0.15% | +0.92% |
  | AUD | +1.37% | +1.60% | +0.65% | +1.25% | +0.89% | | +0.26% | +1.31% |
  | NZD | +0.43% | +1.35% | +0.39% | +0.64% | +0.15% | -0.26% | | +1.05% |
  | CHF | -0.64% | +0.30% | -0.65% | -0.52% | -0.92% | -1.31% | -1.05% | |

  Legend: The heat map shows percentage changes of major currencies against each other. The base currency is on the left, while the quote currency is on top.

  Federal Reserve Update
  

  The Fed cut the policy rate by 25 basis points to 4.5%-4.75% following the November meeting. Chairman Powell indicated a balanced outlook on job market and inflation risks, with no immediate effect from the election results on monetary policy.

  Market Movements
  

• USD Index retreated after recent gains, trading near 104.50.
• US stock index futures are flat, while the 10-year Treasury bond yield hovers above 4.3%.
  

  Currency Pair Updates
  

• EUR/USD: Rebounded but struggled to hold above 1.0800, now near 1.0770.
• GBP/USD: Bullish momentum post-BoE rate cut, trading below 1.3000.
• USD/CAD: Edging higher towards 1.3900 after Thursday’s decline.
• USD/JPY: Corrected sharply, trading below 153.00.
• Gold (XAU/USD): Rebounded 1.8% on Thursday, currently below $2,700.
  

  Central Banks FAQs
  

  Key Insights
  

  1. Price Stability: Central Banks aim to maintain stable prices and manage inflation/deflation.
  2. Policy Rates: Adjusting benchmark rates influences savings, lending rates, and economic growth.
  3. Policy Board Members: Doves prefer loose monetary policy, while hawks advocate for tighter controls.
  4. Chairman’s Role: Leads meetings, creates consensus, and communicates monetary policy outlook.
  5. Market Communication: Central Banks aim to manage expectations without causing market disruptions.

     Stay updated with the latest financial news and market analysis for informed investment decisions.

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     Analysis:
     

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