Forex Today: BoJ to leave rates unchanged

The US Dollar (USD) has come under renewed downside pressure on Thursday, receding to three-day lows while market participants assessed the ECB’s interest rate decision and kept monitoring developments from the Middle East crisis.

The US Dollar Index (DXY) has retreated for the second day in a row, briefly breaching below the key contention zone at 102.00. The Chicago PMI will wrap up the docket, seconded by the quarterly Employment Cost Index data.

The hawkish tone from the ECB and the renewed selling pressure on the US Dollar have lent extra legs to the EUR/USD’s recovery, with spot surpassing the 1.1170 level. Germany will publish its labour market report, along with flash Q3 GDP Growth Rate figures and the preliminary Inflation Rate. In addition, advanced Q3 GDP Growth Rate data in the broader euro area will also be released.

GBP/USD has built on Wednesday’s gains and advanced to three day tops, refocusing on the key 1.3400 hurdle. The Nationwide Housing Prices are due, followed by the BoE’s Decision Maker Panel (DMP).

USD/JPY has managed to reverse the previous day’s retracement and revisit the area above the 158.00 yardstick. The BoJ is expected to leave its interest rate unchanged, while the Unemployment Rate, the Tokyo CPI, Retail Sales, flash Industrial Production data, Housing Starts and Construction Orders will also fulfil the domestic calendar.

AUD/USD has lost momentum soon after hitting five-week highs near 0.7070, eventually ending the day with modest losses in the low 0.7000s. The quarterly Producer Prices will be published alongside Housing Credit/Private Sector Credit figures.

Front-month WTI futures (December contract) have traded slightly lower, regaining some ground after a brief drop below the $100.00 mark per barrel amid renewed hopes of a diplomatic solution to the Middle East conflict.

Gold has lost traction, reversing three daily advances in a row and refocusing on the key  $4,000 mark per troy ounce. Persistently elevated US inflation continues to underpin the Fed’s tighter-for-longer stance, keeping the yellow metal under pressure.