The Greenback saw a significant one-day gain, its biggest since 2020, driven by Trump’s victory and the increasing likelihood of a “Red Sweep.” The focus now shifts to the upcoming Fed meeting, where investors are anticipating a 25-basis-point rate cut. Following Trump’s win, the market will closely monitor the Fed’s stance on potential additional rate cuts.
On Thursday, November 7th, the US Dollar Index (DXY) surged to four-month highs above 105.00 as a result of Trump’s election win and higher US yields. The upcoming Fed interest rate decision will be a key factor, along with other economic indicators such as weekly Initial Jobless Claims and Wholesale Inventories.
EUR/USD experienced a sharp decline, dropping to around 1.0680 in response to the strong performance of the US Dollar. Economic data to watch includes Germany’s Balance of Trade and Industrial Production, as well as the HCOB Construction PMI in Germany and the eurozone, along with Retail Sales figures. Additionally, speeches from ECB officials Elderson, Buch, Lane, and Schnabel are scheduled.
GBP/USD also fell below the 1.2900 support level following the renewed strength of the US Dollar. The Halifax House Prices Index, the Bank of England’s interest rate decision, and a speech by Governor Bailey will be closely watched.
USD/JPY rose to levels not seen since late July, surpassing the 154.00 mark due to the strong demand for the Greenback following Trump’s election victory. Data releases for the day include Average Cash Earnings and weekly Foreign Bond Investment figures.
AUD/USD dropped towards the 0.6500 support level, with some indications of potential stabilization. Economic events to look out for in Australia include the Balance of Trade, Private House Approvals, and Building Permits reports.
Meanwhile, WTI oil prices managed to recover slightly after dropping below $70.00 per barrel earlier in the day. The stronger dollar and an increase in US crude oil inventories, as reported by the EIA, have influenced oil prices.
Gold prices retreated to three-week lows near $2,650 per ounce in reaction to the firmer dollar and higher US yields. Similarly, Silver Prices also saw a sharp decline to three-week lows below $31.00 per ounce.
