Forex Market Today: Dollar Softens as BoJ Holds, Hot PCE Keeps Fed Hike Risk Alive and Tech Selloff Deepens

Federal Reserve • PCE Inflation • Bank of Japan • ECB • Dollar • Gold • Oil • Bitcoin • Big Tech • ECI

🌍 TraderFactor at Wiki Finance Expo Cyprus 2026

Zahari Rangelov will represent TraderFactor and speak at Wiki Finance Expo Cyprus 2026 on November 6 in Limassol.

See event details →

⭐ ActivTrades Review 2026

Explore ActivTrades fees, spreads, regulation, platforms, safety and client-fund protection in our latest review.

READ ACTIVTRADES REVIEW →

Strong Growth, Sticky Inflation — But Markets Are Turning Defensive

Friday begins with a complicated macro picture.

US economic growth accelerated sharply in the third quarter, while the Federal Reserve’s preferred inflation measure also moved higher.

Real GDP expanded at an annualized 3.4% rate in the third quarter, up from 2.2% in the second quarter.

At the same time, headline PCE inflation accelerated to 3.6% year-on-year, while core PCE remained elevated at 3.1%.

On the surface, that combination strengthens the case for another Federal Reserve rate increase in December.

Growth remains strong.

The labour market remains resilient.

Inflation is still considerably above the Fed’s 2% target.

Yet markets did not respond with a straightforward surge in Treasury yields.

Instead, the 10-year yield fell back below 5% as the sharp selloff in AI and technology shares pushed investors toward government bonds.

That has helped weaken the US Dollar slightly and prevented Gold from suffering an even larger decline.

Overnight, the Bank of Japan completed this week’s extraordinary run of global central-bank decisions by leaving its policy rate unchanged at 1.25%.

But the BoJ’s message remains hawkish underneath the headline decision.

Japanese underlying inflation is now consistent with the Bank’s 2% objective, while one policymaker voted for an immediate rate increase.

Meanwhile, Oil remains volatile around the low-to-mid $100 region as diplomatic efforts compete with renewed Middle East supply risks.

And Bitcoin has fallen to a six-week low following a potentially major security incident at Binance.

The central macro question today is no longer whether global central banks have paused. It is whether those pauses will survive persistent inflation, high energy prices and still-resilient economic growth.

❓ Question of the Day

If US inflation remains hot and growth stays strong, how long can the Federal Reserve afford to remain on hold?

Today’s Employment Cost Index will provide another important test by showing whether wage and compensation pressures are cooling or remaining sticky.

📌 Key Market Takeaways

• US economy:
  Q3 GDP accelerated to 3.4%, confirming resilient domestic growth.
• US inflation:
  Headline PCE accelerated to 3.6%, while core remained at 3.1%.
• Federal Reserve:
  Wednesday’s hold increasingly looks like a temporary pause rather than confirmation that tightening is finished.
• Bank of Japan:
  The BoJ held rates at 1.25%, but one policymaker wanted an immediate increase to 1.50%.
• ECB:
  The ECB also held rates but warned that elevated energy prices are increasing inflation risks.
• Treasuries:
  The US 10-year yield has fallen below 5% as the technology selloff generates safe-haven demand.
• Gold:
  Bullion is testing the important $4,000 area as sticky inflation competes with falling bond yields.
• Oil:
  WTI remains highly volatile as peace negotiations compete with fresh regional security concerns.
• Bitcoin:
  BTC has fallen toward a six-week low following a Binance security incident.
• Technology stocks:
  Alphabet’s collapse has been followed by weaker reactions to Amazon and Intel, intensifying concerns around AI spending.
• Today:
  US Employment Cost Index, Canada GDP, European GDP data and Chicago PMI are the main macro releases.

⚠️ TRADER ALERT: DAYLIGHT SAVING TIME

Europe has already moved clocks back while most of the US and Canada change on November 1, so check your broker and economic-calendar times carefully.

The US economy expanded at a 3.4% annualized rate during the third quarter.

That was a significant acceleration from the second quarter’s 2.2% pace.

Investment increased strongly.

Consumer spending remained resilient.

Government spending also contributed positively.

One of the strongest areas remains private investment, particularly spending connected to technology, AI infrastructure and business equipment.

Consumer spending also remained an important growth engine.

That matters because the Fed has been trying to slow inflation without causing an unnecessary recession.

So far, the economy continues to absorb restrictive interest rates surprisingly well.

This supports Kevin Warsh’s argument that the US economy can grow strongly without necessarily being dangerously overheated — particularly if productivity is also improving.

🔥 But PCE Inflation Keeps the Fed Under Pressure

Growth is only one side of the equation.

The other side remains inflation.

The September PCE price index increased 0.5% month-on-month.

Headline annual inflation accelerated from 3.4% to 3.6%.

Core PCE increased 0.3% during the month and remained at 3.1% year-on-year.

These numbers remain significantly above the Federal Reserve’s 2% objective.

Energy remains an important part of the inflation story.

But policymakers cannot simply ignore headline inflation when fuel, transportation and energy costs eventually feed into the prices charged by businesses.

This is why Wednesday’s Fed hold should not automatically be interpreted as the end of the tightening cycle.

The Fed now enters the period before its December meeting with strong growth, resilient employment and inflation that is still too high.

An Important Consumer Warning Is Hiding Under the Strong GDP Number

September personal income increased only 0.2%.

Consumer spending increased 0.5%.

The personal saving rate fell to approximately 3.8%.

That creates an important macro question.

Households are still spending, but income growth is not keeping pace with spending.

Strong consumption can support GDP in the short term, but a falling saving rate may make that spending pace harder to sustain if wage growth slows or energy costs remain elevated.

The Fed held its target range at 3.75%–4.00% on Wednesday.

Two policymakers preferred another immediate rate increase.

Kevin Warsh then told markets that the economy does not appear to be running excessively hot.

That initially produced a less hawkish market reaction.

Thursday’s data now make that message more complicated.

GDP is strong enough to suggest the economy can tolerate restrictive rates.

PCE inflation remains too high.

Initial jobless claims remain exceptionally low.

Oil remains above $100.

None of those developments argue strongly for rate cuts.

The question is whether the Fed needs another hike immediately or whether existing financial conditions are already restrictive enough.

The 10-year Treasury yield near 5% is itself a form of monetary tightening.

The December Fed decision will increasingly depend on whether inflation continues to surprise higher while labour costs remain firm.

The third-quarter Employment Cost Index arrives at 8:30 a.m. ET.

The ECI is particularly important to the Federal Reserve because it measures wages and benefits across the economy.

Compensation costs increased 0.9% during the second quarter and 3.4% over the previous twelve months.

Consensus expectations point toward quarterly growth of roughly 0.8% in Q3.

A stronger number would strengthen the argument that wage pressures remain persistent.

That would support expectations for another Fed hike.

A softer number could provide some relief after yesterday’s hot PCE report.

The ECI may therefore become today’s most important Dollar and Treasury-yield catalyst.

One of Thursday’s most interesting market reactions was the decline in Treasury yields.

Normally, stronger-than-expected GDP combined with rising inflation would create upward pressure on yields.

Instead, the US 10-year yield fell toward 4.94%–4.98%.

The reason was risk sentiment.

The sharp selloff in AI-related shares pushed investors toward the relative safety of US government bonds.

Bond prices rose.

Yields fell.

This creates a major cross-asset tension.

The macro data remain hawkish.

But financial markets are becoming more cautious about the sustainability of enormous AI investment programmes.

If risk aversion intensifies, Treasury yields could remain below 5% even while the Fed keeps another rate hike available.

Alphabet Shock Spreads Through Technology

Alphabet fell approximately 12.6% on Thursday, its worst single-session decline in decades.

The company’s earnings themselves contained strong areas, especially Google Cloud.

But investors focused on the enormous capital spending required to build AI infrastructure.

This is becoming the central issue for the AI trade.

Investors are no longer asking whether AI demand exists. They are asking whether the future returns justify today’s extraordinary spending.

Amazon: Strong AWS, But Capex Raises Questions

Amazon reported revenue of approximately $201.9 billion.

AWS sales increased 39.3%, its fastest growth in nearly five years.

Operating income reached $28.1 billion and Amazon reported a record operating margin.

Those are strong fundamental results.

However, Amazon continues to expect approximately $220 billion of capital expenditure during 2026.

That spending is heavily linked to AI and cloud infrastructure.

Amazon shares fell in after-hours trading as markets again questioned the cost of the AI investment boom.

The lesson from Alphabet and Amazon is similar: investors want stronger evidence that AI revenue can justify rapidly accelerating capital expenditure.

Intel: Strong Quarter, Weak Outlook

Intel reported third-quarter revenue of $16.5 billion, up 21% from a year earlier.

But the company forecast fourth-quarter revenue between $15 billion and $16 billion.

Its forward earnings guidance disappointed markets.

Intel shares consequently fell sharply after hours.

That adds another layer of pressure to global semiconductor and AI-related stocks heading into Friday.

The S&P 500 fell approximately 0.3% Thursday to 7,720.

The Dow declined approximately 0.3% to 52,343.

The Nasdaq Composite fell approximately 1.4%.

The Nasdaq 100 also fell sharply as Alphabet dragged the technology sector lower.

Interestingly, the broader market was healthier than the headline indices suggested.

The Russell 2000 gained approximately 1%.

Most S&P sectors also advanced.

Thursday was therefore less a broad economic selloff and more a concentrated reassessment of expensive mega-cap technology and AI valuations.

The Bank of Japan kept its policy rate unchanged at 1.25%.

The decision was made by an 8–1 vote.

Board member Hajime Takata preferred an increase to 1.50%.

The decision itself was widely expected.

The more important development is the Bank’s inflation assessment.

Underlying inflation has now reached a level broadly consistent with the BoJ’s 2% price-stability target.

That represents a major change after decades in which Japan struggled with weak inflation and deflation.

The BoJ therefore appears increasingly likely to continue normalising monetary policy.

Markets see substantial probability of another increase as soon as December.

USD/JPY may therefore remain supported by high US yields in the short term, but the widening possibility of additional BoJ tightening creates significant downside risk for the pair.

Tokyo Inflation Remains Above Target

Tokyo core consumer inflation increased 2.6% year-on-year in October.

The pace slowed slightly from September but remains comfortably above the BoJ’s 2% target.

Japan’s unemployment rate also fell to approximately 2.4%.

That combination — persistent inflation and a tight labour market — supports further monetary normalisation.

The BoJ governor’s press conference later today will therefore be important for USD/JPY and Japanese bond yields.

The European Central Bank kept all three policy rates unchanged Thursday.

The deposit facility remains at 2.50%.

The ECB said higher energy prices present upside risks to inflation and downside risks to economic growth.

Underlying inflation has remained relatively stable and wages have not yet shown a major second-round response.

But the ECB is concerned that a prolonged energy shock could eventually spread into broader prices.

Christine Lagarde also confirmed that policymakers discussed raising rates before deciding to wait for additional data.

That keeps another increase in December firmly on the table.

Lagarde also announced that she will leave the ECB presidency early in February 2027.

The Euro therefore faces a strange combination: a potentially hawkish ECB rate path but additional uncertainty surrounding future central-bank leadership.

Oil remains one of the most important macro variables in global markets.

WTI settled Thursday around $102 per barrel.

Brent settled around $114.88.

Both benchmarks had fallen more sharply earlier in the session as traders responded to renewed diplomatic efforts between the US and Iran.

However, reports of additional regional attacks brought supply concerns back into the market.

Crude prices have consequently rebounded during Asian trading.

The macro implications are significant.

If diplomacy succeeds and Oil moves sustainably lower, headline inflation could begin receiving meaningful relief.

That would reduce pressure on the Fed, ECB, BoC and other central banks.

If attacks continue and Oil pushes back toward recent highs, the global rate-hiking cycle could last longer.

Oil remains the clearest link between Middle East geopolitics and global monetary policy.

Bitcoin has fallen toward the $77,000 area, reaching its weakest level in roughly six weeks.

This move is not purely macro-driven.

Binance reported a potential security incident and temporarily suspended deposits and withdrawals while investigations continued.

Billions of dollars in associated crypto assets have reportedly been frozen.

The incident comes at a difficult time for crypto.

Treasury yields remain historically high.

The Fed is still considering additional tightening.

Technology stocks are selling off.

And risk appetite has deteriorated.

Bitcoin is therefore facing both macro liquidity risk and crypto-specific security risk.

A break below the recent $76K–$77K region would increase the risk of a deeper correction, while a recovery above $80K would begin to stabilise sentiment.

🇪🇺 EUR/USD: ECB Pause Does Not End the Hawkish Story

EUR/USD is trading around the upper-1.11 area.

The ECB left rates unchanged but warned that energy prices could keep inflation elevated.

Markets therefore continue to see another rate increase as possible in December.

Today’s European GDP data will show how much economic momentum the ECB can afford to sacrifice while fighting inflation.

Support: 1.1140 / 1.1100   |   Resistance: 1.1215 / 1.1250

🇬🇧 GBP/USD: Sterling Benefits From Softer Dollar

Sterling has recovered toward the 1.34 region.

The UK Budget avoided a major gilt-market shock, leaving the Pound increasingly driven by relative monetary-policy expectations.

UK inflation remains elevated, which keeps the Bank of England under pressure heading into next week’s meeting.

Support: 1.3340 / 1.3290   |   Resistance: 1.3420 / 1.3480

🇦🇺 AUD/USD: RBA Hike Expectations Meet Risk-Off Pressure

Australian inflation remains significantly above target.

That has strengthened expectations that the Reserve Bank of Australia may tighten policy next week.

Ordinarily, that would strongly support AUD/USD.

However, the global technology selloff is creating risk-off pressure on growth-sensitive currencies such as the Aussie.

Support: 0.7000 / 0.6960   |   Resistance: 0.7060 / 0.7100

🇳🇿 NZD/USD: Still Processing the RBNZ Surprise

The New Zealand Dollar remains near the low-0.56 area following Wednesday’s unexpected RBNZ hold.

The close 4–3 vote means the central bank has not abandoned tighter policy.

But markets had expected an immediate increase, leaving the Kiwi vulnerable.

Support: 0.5580 / 0.5540   |   Resistance: 0.5660 / 0.5700

🇨🇦 USD/CAD: Canada GDP Meets a Hawkish BoC

The Canadian Dollar remains one of the stronger major currencies this month.

The Bank of Canada raised rates to 2.50% earlier this week.

High Oil prices provide additional support.

Canada releases August GDP today.

The preliminary estimate pointed toward approximately 0.2% monthly growth.

A stronger report would reinforce the BoC’s tightening argument.

Support: 1.3920 / 1.3880   |   Resistance: 1.4010 / 1.4060

🇯🇵 USD/JPY: BoJ Hold Was Expected — December Matters More

USD/JPY remains close to the upper-157 region after the BoJ left rates unchanged.

Japan’s central bank is nevertheless becoming progressively more hawkish.

Inflation remains above target.

The labour market remains tight.

And underlying inflation is now consistent with the Bank’s long-term objective.

This leaves December tightening firmly in play.

Support: 157.20 / 156.50   |   Resistance: 158.50 / 159.20

🇨🇭 USD/CHF: Safe-Haven Demand Returns

The Swiss Franc may receive support from the technology-led risk-off environment and continuing Middle East uncertainty.

That makes USD/CHF increasingly sensitive to both Treasury yields and global equity volatility.

Support: 0.8190 / 0.8150   |   Resistance: 0.8270 / 0.8320

🥇 Gold Tests the $4,000 Area

Gold has slipped toward approximately $4,010 after falling Thursday.

The metal is being pulled in two directions.

The bearish argument is straightforward.

US growth is strong.

PCE inflation is elevated.

The Fed may hike again.

Those factors increase the opportunity cost of holding a non-yielding asset.

But the bullish side is also important.

Treasury yields have moved lower.

The Dollar has softened.

Technology stocks are under pressure.

And geopolitical risks remain elevated.

Those conditions can increase demand for Gold.

Support: $4,000 / $3,975   |   Resistance: $4,050 / $4,100

🥈 Silver Under Greater Pressure

Silver has dropped toward the $52 area.

Unlike Gold, Silver also carries significant industrial exposure.

Technology-sector weakness and concerns about global growth can therefore pressure Silver even when safe-haven demand supports Gold.

Support: $51 / $50   |   Resistance: $53 / $54.50

₿ Bitcoin: Macro Pressure Meets Exchange Risk

Bitcoin’s fall toward $77,000 highlights why crypto should not currently be treated as a traditional safe haven.

The asset has weakened alongside technology shares while Treasury bonds strengthened.

The Binance security incident has added another source of selling pressure.

Bitcoin therefore needs both an improvement in risk sentiment and reassurance around the crypto market’s infrastructure before momentum can stabilise.

Support: $76K / $74.5K   |   Resistance: $79.5K / $81K

🛢️ WTI: Headline Risk Remains Extreme

WTI has rebounded during Asian trading after settling near $102 on Thursday.

Diplomatic headlines can push Oil sharply lower.

Reports of fresh attacks can reverse those moves within hours.

This makes Oil unusually difficult to analyse using economic demand alone.

Support: $102 / $100   |   Resistance: $105.50 / $108

Nasdaq 100

The Nasdaq remains the most vulnerable major US index.

Alphabet’s collapse has now been followed by disappointing after-hours reactions to Amazon and Intel.

The market is questioning AI investment returns rather than simply AI demand.

Falling Treasury yields provide some valuation support, but earnings sentiment is currently dominating.

Support: 29,100 / 28,800   |   Resistance: 29,650 / 30,000

S&P 500

The S&P 500 fell modestly Thursday despite Alphabet’s severe decline.

That suggests the weakness is still concentrated rather than fully market-wide.

If technology selling spreads into financials, industrials and consumer sectors, the broader index would become significantly more vulnerable.

Support: 7,680 / 7,620   |   Resistance: 7,760 / 7,820

US30

The Dow remains relatively insulated from the AI-specific selloff.

Today, energy-company earnings could become an important influence on the index.

Support: 52,000 / 51,600   |   Resistance: 52,800 / 53,200

✅ Bank of Japan Decision

Policy rate held at 1.25%; focus now shifts to the governor’s press conference and the possibility of another increase in December.

European Session — France, Germany, Italy & Eurozone Growth Data

Markets will receive Q3 GDP data across Europe’s major economies, followed by Eurozone GDP and September unemployment.

8:30 a.m. ET — US Employment Cost Index

Consensus is around 0.8% quarter-on-quarter versus 0.9% previously. Wage pressure will be crucial for December Fed expectations.

8:30 a.m. ET — Canada GDP

August economic output is expected to increase around 0.2%, following little growth in July.

9:45 a.m. ET — Chicago PMI

The index is expected to moderate from 58.8 but remain in expansion territory.

Later — Federal Reserve Speakers

Markets will listen for any response to the combination of strong GDP, hotter PCE and falling Treasury yields.

After a week dominated by technology, the focus shifts toward energy, healthcare and industrial companies.

Major Companies Reporting

• ExxonMobil — Oil prices, refining margins and production
• Chevron — energy-market conditions and capital spending
• AbbVie — pharmaceutical demand
• General Dynamics — defence and aerospace spending
• Regeneron — biotechnology and pharmaceutical demand
• Colgate-Palmolive — consumer pricing and volumes

Exxon and Chevron will be especially important because Oil prices above $100 are affecting both corporate profits and the global inflation outlook.

This week’s central-bank decisions reveal an important global pattern.

The Fed held.

The ECB held.

The RBNZ held unexpectedly.

The BoJ held.

The Bank of Canada was the major exception and raised rates.

But this does not necessarily mean the global tightening cycle is ending.

The Fed still faces inflation above target.

The ECB is worried about energy.

The BoJ is increasingly confident that Japan has achieved sustainable inflation.

The RBA faces hot Australian CPI.

And Canada has already moved again.

The better description may therefore be a synchronized global pause between rate hikes rather than the beginning of a global easing cycle.

🎯 TraderFactor Bottom Line

Inflation:
PCE is moving higher again, keeping the December Fed hike debate alive.

Growth:
US GDP remains remarkably resilient at 3.4%.

Treasuries:
Safe-haven demand has pushed the 10-year yield back below 5% despite hot inflation.

Dollar:
Softer yields are temporarily outweighing the hawkish macro data.

BoJ:
Rates remain unchanged, but another Japanese hike is increasingly plausible.

ECB:
Another hold, but energy inflation keeps December tightening in play.

Gold:
The $4,000 area is becoming the key battle between sticky inflation and safe-haven demand.

Oil:
Diplomatic hope and regional attacks continue to pull crude in opposite directions.

Bitcoin:
Macro pressure has been joined by the Binance security incident.

Stocks:
The AI trade is undergoing a major valuation test after Alphabet, Amazon and Intel.

Today’s Employment Cost Index may decide whether markets end the week focused on falling yields — or once again begin pricing a more aggressive Federal Reserve.

💼 Compare Forex Brokers With TraderFactor

Compare regulation, fees, platforms, account types and broker features before choosing a provider.

COMPARE FOREX BROKERS →