Investors digest fed moves, dollar stabilizes following trump win
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Markets steadied on Friday as investors processed recent U.S. election results and Federal Reserve policy announcements. With the USD stabilizing near 104.50, attention shifts to today’s consumer sentiment report and labor data, alongside the Fed’s cautious stance on future rate changes.
Markets Steady Post-Fed, Trump’s Victory Sets Tone
Following a turbulent week sparked by Donald Trump’s return to the presidency and the Federal Reserve’s latest rate cut, markets took a breather early Friday. The Fed’s decision to lower interest rates by 25 basis points to a range of 4.5%-4.75% had been widely anticipated, as the central bank aimed to balance inflation control with economic stability. In a post-meeting statement, Fed Chair Jerome Powell underscored the Fed's neutral stance for December, indicating that short-term policy would not be swayed by the election’s outcome.
US Dollar Performance This Week
The US Dollar saw considerable strength earlier in the week, bolstered by risk-on sentiment. However, following the Fed's statements, the USD Index shed 0.7% on Thursday, settling near 104.50 by Friday morning. A comparative table shows the USD's mixed performance, with gains against the Swiss Franc (+0.64%) and Japanese Yen (+0.43%) but declines against the Australian Dollar (-1.37%) and Canadian Dollar (-0.28%).
EUR/USD and GBP/USD Rebound
Both EUR/USD and GBP/USD staged recoveries on Thursday. The Euro rose briefly above 1.0800 but failed to hold, drifting to 1.0770 by Friday morning. Meanwhile, GBP/USD gained 0.8% after the Bank of England cut its rate by 25 basis points and adjusted its inflation forecast. With the UK’s inflation outlook revised to peak inflationary impact from mid-2026 to early 2027, GBP/USD approached but stayed below the 1.3000 threshold.
USD/CAD and USD/JPY Movements
The USD/CAD pair approached 1.3900 as Statistics Canada prepared to release October labor data. USD/JPY showed a steep correction, falling over 1% after hitting a multi-month high above 154.50 midweek, trading below 153.00 on Friday.
Gold Prices Correct after Rally
Gold saw a substantial recovery on Thursday, rising nearly 1.8% but edging lower to trade below $2,700 Friday. This trend aligns with broader shifts as markets reassess safe-haven demand amid anticipated Fed policy moves.
Investor Focus Shifts to Data Releases
Looking ahead, market participants are focusing on the University of Michigan’s Consumer Sentiment Index for insights into U.S. economic resilience. Treasury yields remain above 4.3%, while U.S. stock index futures are flat, underscoring a stable market response post-Fed and post-election announcements.
Markets Steady Post-Fed, Trump’s Victory Sets Tone
Following a turbulent week sparked by Donald Trump’s return to the presidency and the Federal Reserve’s latest rate cut, markets took a breather early Friday. The Fed’s decision to lower interest rates by 25 basis points to a range of 4.5%-4.75% had been widely anticipated, as the central bank aimed to balance inflation control with economic stability. In a post-meeting statement, Fed Chair Jerome Powell underscored the Fed's neutral stance for December, indicating that short-term policy would not be swayed by the election’s outcome.
US Dollar Performance This Week
The US Dollar saw considerable strength earlier in the week, bolstered by risk-on sentiment. However, following the Fed's statements, the USD Index shed 0.7% on Thursday, settling near 104.50 by Friday morning. A comparative table shows the USD's mixed performance, with gains against the Swiss Franc (+0.64%) and Japanese Yen (+0.43%) but declines against the Australian Dollar (-1.37%) and Canadian Dollar (-0.28%).
EUR/USD and GBP/USD Rebound
Both EUR/USD and GBP/USD staged recoveries on Thursday. The Euro rose briefly above 1.0800 but failed to hold, drifting to 1.0770 by Friday morning. Meanwhile, GBP/USD gained 0.8% after the Bank of England cut its rate by 25 basis points and adjusted its inflation forecast. With the UK’s inflation outlook revised to peak inflationary impact from mid-2026 to early 2027, GBP/USD approached but stayed below the 1.3000 threshold.
USD/CAD and USD/JPY Movements
The USD/CAD pair approached 1.3900 as Statistics Canada prepared to release October labor data. USD/JPY showed a steep correction, falling over 1% after hitting a multi-month high above 154.50 midweek, trading below 153.00 on Friday.
Gold Prices Correct after Rally
Gold saw a substantial recovery on Thursday, rising nearly 1.8% but edging lower to trade below $2,700 Friday. This trend aligns with broader shifts as markets reassess safe-haven demand amid anticipated Fed policy moves.
Investor Focus Shifts to Data Releases
Looking ahead, market participants are focusing on the University of Michigan’s Consumer Sentiment Index for insights into U.S. economic resilience. Treasury yields remain above 4.3%, while U.S. stock index futures are flat, underscoring a stable market response post-Fed and post-election announcements.