04.11.202212:08 Forex Analysis & Reviews: Positive NFP data may support Fed's decision to continue aggressive rate hikes

The outcome of the Fed meeting continues to influence world markets. However, there is a high chance that another local decline will be seen in the stock markets, while the dollar will have a new wave of strengthening. This is because the latest inflation data is coming, as well as the employment report in the US.

Earlier, analysts have pointed out that the Fed will continue its aggressive rate hike if the US economy slide into recession despite the labor market having a good condition. The central bank signaled the same thing, saying that a strong labor market and economy near the edge of a recession will allow them to fight inflation vigorously.

This means that if the US jobs report for October exceeded expectations, the Fed will raise rates again by 0.75%, if necessary. That is why it is better to be cautious and moderately optimistic about the end of the bear market in the equity markets. As mentioned above, there is still a possibility of a new fall in stock indices, which will once again be accompanied by a rise of dollar. This is further evidenced by the dynamics of treasury yields, which are still close to local highs.

Forecasts for today:

EUR/USD

The pair is trading above 0.9750. If the US employment data turn out to be higher than expected, the quote will fall to 0.9650.

AUD/USD

The pair is above 0.6335. Further selling pressure will push it to 0.6250.