Forex Today: What happens if the ECB…?

Fresh selling weighed on the US Dollar (USD) on Wednesday, with investors still assessing the latest FOMC event and uneven moves in US Treasury yields across the curve.

Renewed selling pushed the US Dollar Index (DXY) back towards the 102.00 support zone, snapping a three-day winning run. The data calendar includes the regular weekly Initial Jobless Claims, PCE, Personal Income/Spending and the preliminary Q3 GDP Growth Rate.

After five successive daily declines, EUR/USD recovered to test the 1.1170 region. The ECB is expected to leave its policy rate unchanged at its meeting. The final Consumer Sentiment reading for the euro area is also due.

Following a solid recovery from fresh multi-day lows near 1.3270, GBP/USD posted modest gains and retested the 1.3340 area. Upcoming releases include the BoE’s Consumer Credit data, Mortgage Approvals/Lending, and the BoE’s M4 Money Supply and Net Lending to Individuals figures.

Unable to extend its rally beyond the key 158.00 barrier, USD/JPY finished the day marginally lower near 157.80. The regular weekly Foreign Bond Investment data and the Consumer Confidence reading are scheduled for release.

Fresh five-week highs marked a further rise in AUD/USD, bringing the pair up against its critical 200-day SMA around 0.7060. Australia’s only scheduled data release is Export/Import Prices.

As traders weighed renewed concerns over Middle East supply, front-month WTI futures (December contract) regained upward momentum and climbed above $103.00 per barrel to their highest level of the week.

Higher crude oil prices and a solid rise in US Treasury yields across maturities weighed on Gold, which returned to losses after two consecutive daily gains and traded within close reach of $4,000 per troy ounce.