Forex Today: BoJ set to keep interest rates on hold

The ECB’s interest rate decision was in focus on Thursday as the US Dollar (USD) faced fresh selling pressure and slipped to three-day lows. Market participants also continued to follow developments in the Middle East crisis.

A second consecutive day of declines has taken the US Dollar Index (DXY) briefly below the key support area at 102.00. The remaining data schedule comprises the Chicago PMI and the quarterly Employment Cost Index.

With the ECB adopting a hawkish tone and the US Dollar facing renewed selling, EUR/USD has extended its recovery beyond 1.1170. Germany’s forthcoming releases include the labour market report, flash Q3 GDP growth figures and preliminary inflation data. An advance estimate of Q3 GDP growth for the wider euro area is also due.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Extending Wednesday’s advance, GBP/USD has reached three-day highs, bringing the key 1.3400 resistance level back into focus. Nationwide house price data are due ahead of the BoE’s Decision Maker Panel (DMP).

After reversing the previous day’s pullback, USD/JPY has returned to levels above 158.00. Expectations are for the BoJ to hold interest rates steady. Elsewhere on Japan’s calendar are the unemployment rate, Tokyo CPI, retail sales, preliminary industrial production figures, housing starts and construction orders.

Having reached a five-week high near 0.7070, AUD/USD soon ran out of momentum and finished the session modestly lower in the low 0.7000s. Quarterly producer price data are scheduled for release alongside housing credit and private sector credit figures.

Renewed optimism over a diplomatic resolution to the Middle East conflict briefly pushed front-month WTI futures (December contract) below $100.00 per barrel. The contract subsequently recovered some ground but remained slightly lower.

Following three consecutive daily gains, gold has turned lower, bringing the key $4,000 level per troy ounce back into view. Pressure on the precious metal persists as elevated US inflation continues to support the Fed’s tighter-for-longer policy stance.