Yellen was dovish meaning mixed USD strength. The hot topic discussed the lingering economic damage of the financial crisis and the potential for an accommodative policy with a clear reference towards inflation.
BOE Carney made a decisive stance reiterating the central bank is happy to take inflation with the focus on economic growth as it takes the cushion blow from Brexit. He discussed the low currency rate effect on inflation as a by-product that the UK would be willing to afford. GBP/USD crept slightly lower continuing to test 1.2154. This pressure was further heightened by SNP leader Nicola Sturgeon saying another Scottish referendum is ‘highly likely’ to occur before 2020.
Risk markets had a positive session following firm Chinese inflation data which followed weak export figures. Aussie withstood this pressure across multiple markets as AUD/USD remained above 0.76 after a tough battle against Yellen’s dovish comments in the US session. AUD/NZD gains continued higher above 1.0765 as AUD/JPY recovered after a 60 pip dip in the Asian session to finish at 79.350.
XAU continued downward falling on range that formed 6th October between resistance 1265 and support 1250. This is likely to be tested in the coming days with significant pressure to the downside.
