Psychology for major markets Oct 31
USD still firm post-FOMC
EUR/USD – Testing 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, but some verbal opposition to JPY weakness being heard from the new government.
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, and is holding near those highs. Also some increase in rate cut expectations at the November 6 BoE meeting.
AUD/USD – AUD gained on expectations of a US/China trade deal and higher than expected Q3 CPI, but AUD/USD has slipped back on general USD strength post-FOMC, and remains in the middle of the 0.64-0.67 range that has heled for most of the year.
Equities – S&P 500 holding near new all time highs with US/China trade deal a positive and solid tech earnings., but valuations remain very high.