Forex Today: US Dollar weakens in Fed aftermath, attention shifts to BoE Super Thursday

Here is what you need to know on Thursday, November 2:

The US Dollar stays on the back foot as markets assess the Federal Reserve's (Fed) policy decisions and Chairman Jerome Powell's remarks at the post-meeting press conference. The Bank of England (BoE) will announce the interest rate decision and Governor Andrew Bailey will deliver the Monetary Policy Report at a press conference on Super Thursday. Later in the day, weekly Initial Jobless Claims, September Factory Orders and Unit Labor Costs data for the third quarter will be featured in the US economic docket. 

The Fed left its policy rate unchanged at 5.25%-5.5% as expected. Although Chairman Powell refrained from shutting the door to a rate hike in December, he adopted a cautious tone regarding the need for additional tightening. Powell acknowledged that financial conditions have tightened amid rising yields and reiterated the data-dependent approach, noting that they will have two more inflation and employment data before the December meeting. According to the CME Group FedWatch Tool, the probability of the Fed holding the interest rate steady in December rose to 80% from 69% before the meeting. Meanwhile, the US Dollar Index was last seen losing 0.3% on the day below 106.50 and the benchmark 10-year US Treasury bond yield was moving sideways below 4.75% after falling nearly 4% on Wednesday.

The BoE is forecast to stand pat on policy, leaving the key rate at 5.25% for the second consecutive meeting. After testing 1.2100 on Wednesday, GBP/USD gathered bullish momentum and climbed to the 1.2200 area early Thursday. 

UK Interest Rate Decision Preview: BoE set to stand pat for second consecutive time despite high inflation.

EUR/USD reversed its direction following a decline toward 1.0500 mid-week and was last seen trading in positive territory at around 1.0600.

Gold fluctuated in a wide range on Wednesday but closed the day virtually unchanged slightly above $1,980. XAU/USD holds its ground in the European morning and trades with modest gains near $1,985.

USD/JPY closed in negative territory as US yields turned south on Wednesday. The pair extended its slide during the Asian trading hours on Thursday and was last seen trading below 105.50.

(This story was corrected on November 2 at 07:17 GMT to say that the US Dollar was the weakest against the Swiss Franc).