Forex News

• Gold holds on to Wednesday’s sharp gains, but a recovering US Dollar limits further upside.
• Hawkish Fed expectations remain a key headwind for the non-yielding metal.
• XAU/USD shows improving bullish momentum, with the 21-day SMA offering immediate support.

Gold (XAU/USD) stalls its rebound on Thursday as the US Dollar and Treasury yields regain ground following the previous day’s rout, triggered by US midterm election results that fuelled volatility across financial markets. At the time of writing, XAU/USD trades around $4,105, after reaching an intraday high of $4,146, its highest level in two weeks.

The precious metal surged 3.64% on Wednesday, while West Texas Intermediate (WTI) tumbled 8% as traders speculated that a Democratic sweep of Congress could restrict funding for Trump’s military campaign against Iran and increase pressure to end the war, now in its ninth month.

Moreover, the prospect of divided government eases concerns about the fiscal outlook, as passing new tax cuts or spending packages could become more difficult. This supports Treasury buying and pushes yields lower, weighing on the US Dollar (USD). The slide in Oil prices also offers some relief from inflation concerns, and together these developments drive renewed demand for Gold.

On Thursday, the US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 101.60, recovering from an intraday low of 101.20. The US 10-year Treasury yield rises to 4.89% from an earlier low of 4.83%.

Meanwhile, a hawkish Federal Reserve (Fed) outlook remains a key hurdle for bullion. Oil prices are still well above pre-war levels, keeping inflation risks alive. WTI trades around $89.50 a barrel, up 1.65% on the day at the time of writing.

With the Fed committed to bringing inflation back to its 2% target, traders expect interest rates to remain elevated for longer and anticipate a December rate hike, with the CME FedWatch Tool putting the odds at around 79%. Higher borrowing costs weigh on the non-yielding metal by increasing the opportunity cost of holding it.

Cleveland Fed President Beth Hammack reinforced the hawkish outlook on Thursday, saying “monetary policy needs to move to a restrictive stance” as inflation has been “too high, moving in the wrong direction.” She added that “gradual rate hikes are the best way to make sure the US Central Bank gets inflation back to 2%” and are less disruptive to the economy and financial system.

On the data front, US Initial Jobless Claims to 189K, below the 196K forecast and the previous week’s upwardly revised 195K. The four-week moving average also fell to 194.75K from a revised 197K. Attention now turns to Friday’s Nonfarm Payrolls (NFP) report for fresh clues on the Fed’s policy path.

Technical analysis: Bulls eye 50-day and 100-day SMAs near $4,200

On the daily chart, XAU/USD maintains a capped bias as spot holds below the medium- and long-term moving averages. The 21-day simple moving average (SMA) at $4,077 now underpins the recovery as immediate support, but price remains below the 50-day, 100-day and 200-day SMAs.

Momentum has improved, with the Relative Strength Index near 51 and the Moving Average Convergence Divergence (MACD) turning positive, which hints at rebuilding bullish pressure but does not yet overturn the structurally bearish setup.

On the downside, initial support is seen at the 21-day SMA around $4,077, followed by the psychological $4,000 level and the year-to-date low of $3,870.

On the upside, immediate resistance is seen at the closely aligned 100-day and 50-day SMAs at $4,203 and $4,205, respectively. A more substantial barrier emerges at the 200-day SMA near $4,468. Only a clear daily close above these clustered moving averages would start to ease the prevailing bearish bias.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

(This story was corrected on November 5 at 15:30 GMT to reflect revised previous readings of 195K for US Initial Jobless Claims and 197K for the four-week moving average, instead of 194K and 196.75K, respectively.)

• EUR/USD turns lower as the US Dollar recovers from the post-election sell-off.
• Low US Jobless Claims and hawkish Fed remarks reinforce December rate hike expectations.
• Eurozone producer inflation accelerates as traders also price in further ECB tightening.

EUR/USD slips into negative territory on Thursday as the US Dollar (USD) rebounds from its post-election sell-off. Lower-than-expected US Initial Jobless Claims and hawkish remarks from Federal Reserve (Fed) officials help the Greenback regain ground. At the time of writing, the pair trades around 1.1220, easing from an intraday high of 1.1268.

The Greenback fell to five-week lows on Wednesday as the Democratic sweep of Congress fuelled expectations of less fiscal expansion under a divided government, pushing Treasury yields lower. The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 101.60, recovering from an intraday low of 101.20.

Traders also bet that Congress could restrict funding for President Donald Trump’s military campaign against Iran and increase pressure to end the war. This sent Oil prices sharply lower, though they remain well above pre-war levels, keeping inflation risks alive.

Cleveland Fed President Beth Hammack said on Thursday that “monetary policy needs to move to a restrictive stance” as inflation has been “too high, moving in the wrong direction.” Richmond Fed President Thomas Barkin said, “I do not anticipate inflation will accelerate, but also don’t see it falling at this point.” He described inflation as the Fed’s most important risk and said gradual tightening “makes sense.”

On the data front, US Initial Jobless Claims fell to 189K from an upwardly revised 195K, below expectations of 196K, while the four-week moving average declined to 194.75K from an upwardly revised 197K. Together, the data and remarks reinforce expectations of another Fed rate hike in December. Attention now turns to Friday’s Nonfarm Payrolls (NFP) report for fresh clues on the Fed’s policy path.

On the Euro side, traders also anticipate another European Central Bank (ECB) rate hike in December as inflation risks remain tilted to the upside. Eurozone Producer Price Index (PPI) inflation accelerated to 2.5% MoM in September from 2.0%, while the annual rate rose to 11.1% from 8.3%.

ECB Governing Council member Ante Zigman said inflation continued to rise in October, but added that it was “too early to say how much more tightening is needed.”

(This story was corrected on November 5 at 15:30 GMT to reflect revised previous readings of 195K for US Initial Jobless Claims and 197K for the four-week moving average, instead of 194K and 196.75K, respectively.)

Norman Liebke at Commerzbank expects Banxico to keep rates unchanged after roughly 300 bps of cuts last year and two more this year, as inflation remains slightly above the 3% target and prior easing has yet to fully filter through. He sees a high hurdle for further cuts, but notes that renewed disinflation could reopen easing and weigh on the Peso.

High bar for fresh Banxico cuts

"The Mexican central bank meets this evening at 8:00 p.m. Central European Time and will announce its interest-rate decision. Market-implied rate expectations suggest that market participants expect rates to remain on hold. A large majority of respondents to the Bloomberg survey also expect no change. Accordingly, the focus is likely to be less on the rate decision itself and more on Banxico’s outlook going forward. Deputy Governor Galia Borja recently said that inflation was moving back towards the 3% inflation target and that this was, overall, “a good sign”. "

"We therefore expect the hurdle for another rate cut to be high enough, given the easing already delivered and the geopolitical environment, for Banxico to hold steady for now. The recent uptick in inflation and the fact that the full impact of the previous rate cuts has yet to feed through also argue in favour of a wait-and-see approach. In addition, the peso’s recent depreciation could exert further upward pressure on inflation through higher import prices. "

"This does not necessarily mean that the rate-cutting cycle is over, however. If inflationary pressures ease more clearly again in the coming weeks and months, another rate cut could become more likely. This would likely weigh on the peso, as such a move is currently not priced in. Quite the opposite: one-year rate expectations currently imply two rate hikes of 25 basis points each."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

TD Securities analysts argue that despite a changed political backdrop after a Democratic blue wave, the Federal Reserve is still likely to deliver additional tightening. They expect 50 basis points of further hikes by Q1 2027, while noting potential turnover at the Fed, evolving hawkishness from Chair Warsh, and conditional scenarios where easing Iran tensions or weaker AI investment could cap tightening.

Blue wave reshapes but does not halt hikes

"While the political landscape has changed, the macro environment remains somewhat uncertain regarding the outcome of the Iran War and the outlook for AI investment. We remain confident, however, that the Fed will continue tightening policy in the near term, implementing an additional 50bp of rate hikes through Q1 2027. If the midterm elections result in finding closure on the Iran War and/or the paring back of AI investment, the Fed might not need to tighten policy any further after March."

"With the changing political landscape, Warsh might turn more hawkish just as the Committee shifts more dovish next year. The outcome of the Iran War and the outlook for AI investment will determine how much tightening the Fed needs to implement. We still look for 50bp of further rate hikes."

"Less acute political pressures on the Fed might allow for turnover in the Committee. Powell might finally decide to retire. The risk is that Trump does not appoint replacements, letting the Fed run understaffed."

"While the AI trade, debt ceiling, fiscal policy, and bank regulation will be closely watched, we expect markets to re-focus on macro fundamentals as inflation remains too high, and the economy remains firm. This could keep both rates and volatility elevated."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note that AUD/USD briefly dipped to 0.6954 before rebounding strongly to 0.7022 as risk appetite improved and the US Dollar softened. They see the intraday move as overdone, expecting a 0.6985–0.7025 range, and have shifted to a neutral one-to-three-week stance, looking for consolidation between 0.6970 and 0.7040 after the prior downside break failed.

Range trading expected after failed downside

"24-HOUR VIEW: AUD fell more than we expected two days ago, reaching a low of 0.6962. Yesterday, we stated that “conditions are deeply oversold, and “AUD is unlikely to weaken much further,” and we held the view that AUD “is likely to consolidate between 0.6960 and 0.6995.” The subsequent price movements did not unfold as expected. AUD dipped to 0.6954 and then staged a sharp rebound, reaching a high of 0.7022. The sharp advance appears to be overdone, and AUD is unlikely to strengthen much further. Today, AUD is more likely to range-trade between 0.6985 and 0.7025."

"1-3 WEEKS VIEW: We turned negative on AUD two days ago (03 Nov, spot at 0.7000). Yesterday (04 Nov, spot at 0.6970), we highlighted the following: “Further downside in AUD is not ruled out, but oversold short-term conditions could slow the pace of any declines, and 0.6935 may not come into view so soon. On the upside, a breach of 0.7015 (‘strong resistance’ level) would mean that AUD is not declining further.” However, after declining to a low of 0.6954, AUD surged and broke above our ‘strong resistance’ with a high of 0.7022. We are neutral on AUD now and expect it to trade between 0.6970 and 0.7040 for the time being."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

OCBC’ strategists Sim Moh Siong and Christopher Wong report that Silver has outperformed Gold, gaining nearly 5% as precious metals recovered on a softer USD and lower yields. The rebound is linked to Silver’s higher sensitivity to monetary conditions and prior positioning washout. While sentiment has improved, the bank warns that mixed industrial demand, especially in photovoltaics, could temper further gains unless USD strength and real yields ease further.

Outperformance tempered by industrial demand

"Silver outperformed gold, gaining nearly 5% as the broader precious metals complex recovered."

"The rebound was likely amplified by silver’s greater sensitivity to changes in monetary conditions and reduced speculative positioning following October’s sharp correction."

"While the improvement in sentiment is encouraging, the industrial demand outlook remains mixed, particularly with continued thrifting and substitution in photovoltaic applications."

"Immediate resistance at 54.1/ 55.2 levels (23.6% fibo retracement of Aug high to Nov low), 57.40 (38.2% fibo). Clearing those hurdles cleanly may be needed for sentiment to stabilise. Support at 48 levels."

"Mild bearish momentum shows signs of fading while RSI rose."

"Further easing in USD strength and real yields could see silver extend its recovery alongside gold, although industrial demand concerns may temper the pace of gains."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Swiss National Bank (SNB) Chairman Martin Schlegel said the policy rate remains the central bank’s main tool during a speech titled 'Transmission and conduct of monetary policy in Switzerland' at a conference in Zurich on Thursday.

Key takeaways

SNB’s main tool is the policy rate; if necessary, it also uses other measures like forex interventions.

SNB has met the price stability goal so far this century.

Our monetary policy strategy works across a broad range of circumstances.

The Swiss Franc has relatively strong safe-haven properties compared to other currencies.

Switzerland is highly exposed to external economic shocks.

SNB doesn’t believe in using forward guidance.

We have the right tools to fight inflation in the future.

At present, we don’t see a broadening of price pressures in Switzerland.

Swiss inflation at the moment is mainly limited to fuel and energy.

Commerzbank’s Antje Praefcke notes that EUR/USD has been firm as the Dollar suffers from political fallout in the US and Euro area inflation hits 4%. With core inflation at 2.5% and the ECB deposit rate at 2.50%, markets now price in two further ECB hikes by mid‑2027, which currently underpin the Euro despite medium‑term growth concerns.

Euro benefits from ECB expectations

"EUR/USD steadily gained ground over the course of yesterday’s trading session. Initially, the dollar suffered from the after-effects of the Democrats’ landslide victory. The fact that Trump’s policies were punished so decisively came as something of a surprise."

"At the same time, euro area inflation rose to 4% year-on-year in October, while the core rate remained unchanged at 2.5%. Although these figures were in line with analysts’ expectations, with an inflation target of 2% and a deposit rate of 2.50%, they clearly make the case for further ECB rate hikes. After all, as a consequence of persistently high energy prices, an increasing number of companies is likely to pass on higher costs over time."

"As a result, core inflation is likely to rise in the coming months, even if headline inflation may already start to decline again due to base effects. The market therefore sees a good chance of two further ECB rate hikes by the middle of next year. For the time being at least, these expectations are providing support to the euro - although, of course, higher interest rates will weigh on the growth outlook over the medium term."

"The US labour market report is still due tomorrow. However, the Fed’s current focus is on inflation rather than employment. Moreover, the report is likely to be solid but unspectacular, meaning that it is unlikely to provide much tailwind for the dollar, especially since a Fed rate hike in December is already largely priced in. It is therefore possible that this week will ultimately belong to the euro, allowing it to head into the weekend somewhat stronger against the dollar."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Cleveland Federal Reserve (Fed) President Beth Hammack argued on Thursday that gradual rate hikes are less disruptive to the economy and the financial system, per Reuters.

Key takeaways

"Monetary policy needs to move to a restrictive stance."

"Gradual rate-hike path is the best way forward for monetary policy."

"US central bank's independence is critical to get inflation to 2%."

"Gradual rate hikes best way to make sure us central bank gets inflation back to 2%."

"Inflation has been too high, moving in wrong direction."

"Dollar remains word’s top reserve currency."

Hammack backs gradual hikes and restrictive stance, keeping Fed tone firmly hawkish

Fed’s Hammack delivered a distinctly hawkish message, with an FXS Speechtracker score of 8.1/10, above the established baseline of 7.6/10, underscoring a stronger-than-usual tightening bias. The emphasis that “gradual rate hikes” are “less disruptive” yet still necessary to move policy into a “restrictive stance,” alongside the warning that inflation is “too high” and “moving in the wrong direction,” signals a clear preference for continued tightening rather than a pause.

The FXS Fed Sentiment Index rose by 1.05 points to 145.23, reinforcing that Hammack’s remarks push the overall Fed tone deeper into hawkish territory. With the index well above the neutral 100 mark, the speech aligns with a policy path biased toward additional rate hikes and sustained restrictive settings, consistent with the elevated FXS Speechtracker reading.

• Silver loses momentum following Wednesday's sharp rally as the US Dollar and Treasury yields recover.
• XAG/USD remains below the Bollinger midline near $55, keeping the broader bearish bias intact.
• RSI recovers from oversold territory, but negative MACD and elevated ADX signal persistent selling pressure.

Silver (XAG/USD) struggles to extend gains on Thursday after surging 5.18% the previous day, as a rebound in the US Dollar (USD) and Treasury yields takes some momentum out of the rally. The white metal climbed to $53.48 earlier on Thursday, its highest level since October 29, before easing to around $52.79 at the time of writing.

Wednesday’s rally followed the Democratic sweep of Congress, with traders betting that a divided government could curb fiscal expansion and put pressure on President Donald Trump to end the war with Iran. The outcome triggered broad-based US Dollar weakness, while tumbling Oil prices eased inflation concerns and helped push Treasury yields lower, lifting demand for precious metals.

However, expectations of another interest rate hike by the Federal Reserve (Fed) in December provide support for the Greenback and remain a headwind for non-yielding assets such as Silver.

Data released on Thursday showed US Initial Jobless Claims fell to 189K from 194K, below expectations of 196K. The four-week moving average declined to 194.75K from 196.75K. Attention now shifts to Friday’s US Nonfarm Payrolls (NFP) report for fresh clues on the Fed’s policy path.

Technical Analysis

On the daily chart, XAG/USD continues to form lower highs after briefly peaking near $70 in late August, signalling that sellers retain control. The metal holds below the Bollinger Bands’ 20-period Simple Moving Average (SMA) at roughly $55 and well under the upper band resistance near $61.67. Price is sliding within the lower half of the volatility envelope.

The Relative Strength Index (RSI) (14) has recovered from oversold territory to around 40 but remains below the midline and Moving Average Convergence Divergence (MACD) remains slightly negative, hinting that downside momentum persists despite a modest loss of selling pressure, with a strong Average Directional Index (ADX) above 40 underscoring a still-solid prevailing trend.

On the downside, immediate support is seen at the horizontal floor around $50.00, ahead of the lower Bollinger Band near $48.40, where volatility support could emerge if the selloff extends. On the topside, initial resistance comes at the Bollinger mid-line at about $55.04, and only a sustained recovery above that barrier would open the way toward the upper band resistance around $61.67, where sellers are likely to reassert control.

(The technical analysis of this story was written with the help of an AI tool. Know more.)