The exchange value of the US dollar (USD) weakened before midnight from Thursday to Friday, November 3 this year, based on investment sentiment, when most investors, traders and other participants in the financial markets became convinced that the central bank of the United States of America (US) Federal Reserve System (FED) will not raise interest rates this year. The last meeting of the Federal Open Market Committee of the US central bank Federal Open Market Committee (FOMC) at its last meeting, which took place in this 44th week of 2023 on 31.10-1.11.2023, left rates unchanged for the second time.
In response to these facts, the exchange value of the USD has already begun to decline slightly within the forex trades of the foreign exchange market. According to brokerage analysts and financial strategists of the foreign exchange market, the current rally in the US dollar is already over, and in view of the likely continued decline of the USD, more investors will put their investments in securities through the stock market. Currently, during the European morning of Friday, November 3, 2023, at approximately 4:29 CET, the exchange value of the American dollar (USD) according to the dollar index DXY (US Dollar Currency Index) was moving at the level of the point status at the value of 106.09 USD points with a daily decrease of -0.03% of the point value so far according to this index, which compares the value of the USD with the other six major world currencies. Thus, the global currency pair of the single European currency Euro (EUR) and the US dollar (USD) traded at a mutual exchange rate of 1.063 USD per EUR with the daily strengthening of the EUR by + 0.06% against the USD.
The commodity market also reacted to this beginning drop in the exchange value of the US dollar (USD), where, especially after the FED did not raise rates, the value of investment gold rose and is again approaching the USD 2,000 mark per troy ounce. On the indicated day and time, investment gold was traded on the COMEX (Commodities Exchange Centre) at a value of USD 1,993.90 per troy ounce, with a daily increase of +0.02% in its price so far. The stock market, and especially the US stock market on Wall Street, welcomed the fact that there was no further increase in interest rates by the FOMC, the FED de facto, and stock prices rose significantly in the last trading session on Thursday, November 2, 2023. For example, the prestigious and selective DJIA stock index added +1.70% points more during this trading day, the NASDAQ stock index, which is mainly composed of technology companies’ stock titles, also saw an increase in its point value by +1.78% points. the S and P 500 index was not left out of this trading activity either, which increased its point status for this trading day by +1.89% points.
Financial markets are now valuing a less than 20% chance of a Fed rate hike this December 2023, compared with a 39% chance a month earlier, CME’s FedWatch tool showed, as a result of the US central bank holding interest rates at a so-called stable level on Wednesday. However, the FOMC Fed left the door open to further increases in borrowing costs in line with the economy’s resilience. Thursday’s data from 11/2/2023 showed that the number of Americans who filed new claims for unemployment benefits rose slightly last week as the labor market continued to show no signs of a significant slowdown. “The data flow supported the notion of a soft landing and the nearing end of the US tourism cycle,” said Tapas Strickland, head of market economics at NAB. Investors will now focus on the October data on non-farm payrolls during Friday, November 3, 2023, when the US Department of Labor will traditionally publish official data on the first Friday of the month. Investment strategists’ consensus is expected to grow by around 180,000 jobs, with a weaker result likely to put further pressure on the US dollar. Analysts said any further drop in the USD was likely to be temporary, pointing to the strength of the US economy relative to the rest of the world.