Hawkish Powell boosts the Dollar and ends positive Streak in Wall Street

During the Asian session, the Reserve Bank of Australia will publish its Monetary Policy Statement following Tuesday’s rate hike. The New Zealand BusinessNZ Manufacturing Index is due. Later in the day, the focus will shift to UK growth data and the University of Michigan Consumer Sentiment survey.

Here is what you need to know on Friday, November 10:

The US Dollar jumped on Thursday after Federal Reserve Chairman Jerome Powell’s hawkish remarks. Powell expressed that they are not confident that they have achieved a “stance of monetary policy that is sufficiently restrictive to bring inflation down to 2 percent over time”. 

Powell’s comments further boosted US yields, which were already rising due to a weak 30-year bond auction. The 10-year yield reached 4.65%, and the 2-year yield surpassed 5%. The US Dollar Index climbed toward 106.00. Stocks in Wall Street dropped, ending a seven-day positive streak. 

US data showed that Initial Jobless Claims totaled 217,000 in the week ending November 4, while Continuing Claims rose for the seventh consecutive week to 1.83 million, the highest level since mid-April. On Friday, the University of Michigan Consumer Sentiment survey is scheduled for release.

EUR/USD dropped to test the weekly low area around 1.0660. The pair is moving with a bearish bias ahead of the Asian session, driven by a stronger US Dollar.

GBP/USD continued to decline for the fourth consecutive day, falling towards 1.2200. The Pound faces a critical day with the release of UK economic data on Friday, including Q3 Gross Domestic Product growth and September industrial production. The forecast suggests a 0.1 percent contraction during the fifth quarter.

USD/JPY rose boosted by higher yields, climbing above 151.50. Further gains are likely to put Japanese authorities on alert.

AUD/USD tumbled to the 20-day Simple Moving Average (SMA) at 0.6370. The pair continues to give up last week’s gains. The Reserve Bank of Australia (RBA) will release its Monetary Policy Statement after raising the official cash rate (OCR) by 25 basis points on Tuesday.

NZD/USD failed to hold onto gains and struggled to stay above 0.5900, affected by risk aversion and the strength of the US Dollar. The BusinessNZ Manufacturing Index is due on Friday.

The correlation between gold and US yields has deteriorated in recent sessions. On Thursday, the yellow metal remained relatively steady when yields jumped. XAU/USD posted gains, ending around $1,955, while Silver flirted with $23.00 but retraced back to $22.55.