Psychology for major markets Oct 30
USD firmer post-FOMC, JPY weak post-BoJ
EUR/USD – Edging towards the bottom of the 1.1540-1.1780 range that has held this month with the USD generally firmer after the FOMC was seen as less dovish than the market was pricing.
USD/JPY – JPY fell back again after BoJ left rates unchanged and Ueda sounded in no hurry to hike. Generally firm USD and strong equities also propelling USD/JPY higher. EUR/JPY at new all time highs.
EUR/GBP – EUR/GBP reached new highs for the year at 0.8814 on reports of a reduction in OBR productivity projections which will further increase UK fiscal problems. Also some increase in rate cut expectations at the November 6 BoE meeting.
AUD/USD – AUD stronger on expectations of a US/China trade deal and higher than expected Q3 CPI, but AUD/USD upside limited by USD strength post-FOMC.
Equities – S&P 500 holding near new all time highs with US/China trade deal a positive, despite lack of detail. But valuations remain very high, and quarterly earnings from major tech companies have so far had a mixed response.