Here is everything you need to know .
In Forex the Japanese Yen came under significant selling pressure. After the Bank of Japan’s (BoJ) monetary policy statements, on Tuesday. Later in the session, Eurostat will publish the October Harmonized Index of Consumer Prices (HICP). The August Housing Price Index and the Conference Board’s Consumer Confidence Index data. For October will be on the US economic calendar ahead of the Federal Reserve’s crucial monetary policy announcements on Wednesday.
The US Dollar (USD) suffered on Monday as market sentiment improved in the second half of the day. With the USD Index closing in negative territory. However, rising geopolitical tensions aided the currency’s gain. During Tuesday’s Asian trading hours, the USD Index climbed near 106.50. Wiping out a major amount of Monday’s losses. Late Monday, Israel’s Defense Forces said that it will continue its ground incursion into Gaza. And Israeli Prime Minister Benjamin Netanyahu stated that he will not agree to a cease-fire.
As expected, the Bank of Japan left policy settings unchanged following its October meeting. Keeping the interest rate and 10-year Japanese government bond (JGB) yield target at -0.1% and 0% respectively. Following high inflation readings, some experts predicted that the Bank of Japan will raise the 10-year yield ceiling from 1% to 1.25%. “The Bank will maintain its target level of 10-year Japanese government bond (JGB) yields at around zero percent, and it will conduct its operations accordingly.” The BoJ said in a statement that it will “control yields primarily through large-scale JGB purchases and nimble market operations” with an upper bound of 1.0% for these rates as a guideline. On the back of the BoJ’s inaction, the USD/JPY gained more than 0.5% on the day, closing over 150.00.
Meanwhile, data from China revealed that the NBS Manufacturing PMI fell to 49.5 in October from 50.2 in September, while the NBS Non-Manufacturing PMI fell to 50.6 from 51.7 in September.
Forex movement in pairs
On Monday, the EURUSD reached a new six-day high above 1.0600 before losing steam early Tuesday. Annual HICP inflation in the Eurozone is expected to fall to 3.2% in October from 4.3% in September. The information from Germany, inflation, as measured by the change in the Consumer Price Index (CPI), fell to 3.8% year on year in October from 4.5% in September. This number was below than the market’s expectation of 4%.
GBPUSD dropped below 1.2150 after advancing toward 1.2200 on Monday, pressured by the unfavorable shift in risk sentiment.
Following the poor Chinese data, the NZDUSD weakened and was last seen trading in negative territory below 0.5850. Statistics New Zealand will release labor market data for the third quarter during the early trading hours of the Asian session on Wednesday.
Following the bearish activity in the European session, gold reversed course and surpassed $2,000 in American trading hours on Monday. XAUUSD, on the other hand, struggled to maintain its upward momentum and fell to $1,990 early Tuesday.
