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The US dollar was stable on Monday, but investors prepared for further declines as the Fed turned less hawkish and US job growth slowed.
Despite soaring inflation driven by the energy crisis and supply chain issues, the Bank of England has maintained its existing policy.
The euro and pound were set for weekly gains vs. the dollar as global bond yields fell, and the Aussie dollar had its best week since mid-July.
The pound rose pre-BOE rate decision, and the dollar fell post-Fed, maintaining rates. Market reactions followed these key events.
The battered yen gets respite; Japan hints at intervention. The focus shifts to the Fed meeting after the BOJ's underwhelming decision.
The Bank of Japan altered yield curve control, letting 10-year bonds yield over 1%. This boosted inflation hopes and weakened the yen.
The yen weakened on Tuesday and languished near a one-year low against the dollar, after the BOJ edged towards ending years of massive monetary stimulus.
Investors should be mindful of the "Halloween effect," with historical data showing the S&P 500 performing well during this period.
The dollar steadied on Monday though the yen managed to stay on the stronger side of 150 per dollar, as traders looked ahead to several events this week.
The dollar rose on Friday and is set for a third monthly gain as the economy growth accelerated and the ECB left interest rates unchanged.
The dollar hovered near a three-week high on Thursday, while the yen hit a low for the year of 150.78 in intraday trading.
The Nasdaq 100 index has failed to outperform the market since July amid a strong U.S. economy and increased stock market volatility.
On Wednesday, the USD stabilized as the AUD surged to a near two-week high due to strong inflation data, hinting at potential interest rate hikes.
The dollar hit a one-month low as Treasury yields fell. Upcoming US GDP data on Thursday may further impact bond markets.
