Forex Today: US jobs data take centre stage as Midterms hangover lingers

The Democrats’ stunning victory in the US midterm elections left market participants weighing the implications on Wednesday, with the US Dollar (USD) broadly under pressure and briefly falling towards five-week lows.

After falling to within a few pips of the 101.00 support zone, the US Dollar Index (DXY) attempted a subdued rebound. The regular weekly Initial Jobless Claims release is due, together with Challenger Job Cuts.

Broad-based US Dollar weakness helped EUR/USD extend its recovery this week, with the pair testing multi-week highs around 1.1270. On the data calendar are the S&P Global Construction PMI readings for Germany and the Eurozone, alongside Germany’s Factory Orders and Producer Prices for the wider euro area.

A brief move above the 1.3500 barrier, the first since mid-September, accompanied GBP/USD’s sixth successive daily gain. At its forthcoming meeting, the BoE is expected to lift its policy rate to 4.00%. The only notable data release will be the S&P Global Construction PMI.

Another failure to sustain gains around 158.80 left USD/JPY modestly lower, reversing two consecutive daily advances. The forthcoming releases include the final S&P Global Services PMI, the BoJ Minutes and a 10-Year JGB Auction. 

A rebound from around three-week lows has taken AUD/USD back above the key 0.7000 level, albeit only slightly. Australia’s next releases will be the final Building Permits and Private House Approvals figures on 9 November.

As traders continued to weigh the prospect of an end to the US-Iran crisis following the Democrats’ US midterm election victory, front-month WTI futures (December contract) extended this week’s correction. Prices retreated towards three-week lows near $91.00 per barrel.

A pronounced US Dollar sell-off and lower US Treasury yields across the curve helped Gold regain ground above the key $4,000 level per troy ounce, reaching fresh four-day highs in the process.