Today, the US dollar recorded some volatility but continued to trade horizontally overall this month. However, US economic data remained strong with business activity expanding in October.
Preliminary estimates of both the Manufacturing and Services PMI indices exceeded expectations, while GDP growth figures were higher than expected, which could support the currency.
The Federal Reserve’s meeting remains the main event for the week and could lead to traders being more cautious in the coming days. The Federal Reserve is expected to keep its interest rates unchanged.
However, Jerome Powell’s comments could fuel volatility and could affect traders’ expectations about the direction of monetary policy.
The Euro rebounded slightly after Germany’s GDP growth figures for the third quarter came up better than expected.
The country’s economy shrunk less than forecast. Economic growth in the euro area remains a concern for traders and could continue to weigh on the European currency’s performance.
The softer stance of the European Central Bank could also leave the euro weaker against its US counterpart.
The British pound has been without a clear direction for the last couple of days. Attention is now turning toward the Bank of England’s meeting. BoE’s policymakers are expected to maintain the current interest rate of 5.25%.