Forex markets this week will likely take their direction by the Fed announcement on Wednesday, 2 November.
However, given the PCE data on Friday, and the resilience of median inflation, a Fed pivot has long odds, in our opinion.
The central bank will deliver 75bps for this meeting, but it is unclear if it will provide 50bps or 75bps in December (48% vs 47% probabilities).
FXCM’s US DOLLAR basket gapped up on open today, and the MACD histogram has ticked higher (green trendline) in anticipation.
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