The Federal Reserve kept its rate on hold on Wednesday evening but left a December increase on the table, and Thursday now turns to the inflation data the Fed watches most closely and to the European Central Bank. Gold rose to about $4,078 while Chair Kevin Warsh spoke, then gave the move back in Asia to trade near $4,034 in early London trade. The dollar index held close to 102.2.
This report was first written on Thursday 29 October in the London morning, after the UK Budget, the Bank of Canada and the Fed, and updated in the early afternoon UK time with the US PCE and GDP figures and the ECB decision. Morning prices are from late US trade on Wednesday and from Asian and early European trade on Thursday. Short updates go out on our free Forexuro Telegram channel every trading day.
Free on Telegram. Follow our read on the dollar, gold, PCE and the ECB through Thursday on the Forexuro channel.
The Fed holds, two members vote for a hike
The Federal Open Market Committee left the federal funds range at 3.75% to 4.00% in a 10 to 2 vote. Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented in favour of a quarter point increase. The statement said economic activity is expanding at a strong pace and that inflation remains elevated.
At the press conference Chair Kevin Warsh said the committee wants more information before deciding its next step and did not commit to a move in December. Futures still priced about an 83% chance of a quarter point rise at the 8 to 9 December meeting, Kitco reported. The 2 year Treasury yield fell while the 10 year yield rose to about 5.03%. Our FOMC rate decision page explains how the statement, the vote and the press conference each tend to move the dollar and gold.
Gold gives back its Fed day gain
Spot gold traded near $4,077.99 on Wednesday afternoon in New York, up about 0.4%, as the dollar eased during the press conference, according to investingLive. In Asia on Thursday the metal fell about 0.65% to near $4,040 as the dollar regained ground, FXStreet reported, and it was close to $4,034 in early London trade. Spot silver was near $53.72 in late US trade.
Higher long term yields and oil above $100 keep the inflation story alive, which is why the PCE release matters for bullion today. Live levels and the session range sit on our XAU/USD today page, and the gold pip value calculator converts a dollar move into account currency before you size a trade.
Oil eases from Wednesday's jump
Brent settled at $115.32 a barrel on Wednesday, up 1.3%, after Yemen's Houthis said they had hit Saudi Arabia's Ras Tanura refinery. On Thursday Brent fell 82 cents to $114.50 by 01:32 GMT and US crude was down $1.04 at $101.74, CNBC reported, after the Wall Street Journal said US Vice President JD Vance had written to Iranian official Mohsen Rezaei to revive talks.
US crude stocks fell by 1.9 million barrels in the week to 23 October, the Energy Information Administration said, against forecasts for a small build. Oil that stays this high feeds into inflation data like PCE, which supports the case for higher rates.
Bank of Canada hikes and the UK Budget passes quietly
The Bank of Canada raised its overnight rate by 25 basis points to 2.50%, its first increase since July 2023, to reduce the risk that high energy prices spread into wider inflation. Governor Tiff Macklem said a further rise could be needed but the bank would proceed carefully. The Canadian dollar firmed to about 1.40 per US dollar after trading between 1.3990 and 1.4068, The Globe and Mail reported.
In London, finance minister John Healey's first Budget kept the fiscal rules and put headroom at £15 billion for 2029/30, down from £23.6 billion in March. The 10 year gilt yield fell about 2 basis points to near 5.32% and sterling was little changed at about $1.3295, Reuters reported. GBP/USD was near 1.3316 in early London trade on Thursday. The Bank of England decides next on 5 November at 12:00 UK time. For how cable trades around UK fiscal news, see our GBP/USD signals for the Budget week.
Thursday: PCE, GDP and the ECB
The US releases third quarter GDP and the September PCE price index, the Fed's preferred inflation gauge, at 12:30 UK time. The European Central Bank announces its decision at 13:15 UK time, and President Christine Lagarde's press conference follows at 13:45 UK time.
EUR/USD was near 1.1140 in early London trade, after a quiet Asian session. USD/JPY was near 157.76 in Asia, with the yen slightly firmer ahead of the Bank of Japan decision on Friday, where the rate is expected to stay at 1.25%, Investing.com reported. Our EUR/USD today page tracks the euro levels through the ECB, and the EUR/USD signals for the Fed and ECB week cover how the pair trades when both central banks speak in the same week.
Afternoon update: PCE in line, the ECB holds
The US numbers landed at 12:30 UK time. The headline PCE price index rose 0.5% in September and 3.6% on the year, up from 3.4%, while core PCE rose 0.3% on the month and 3.1% on the year. Both readings matched forecasts, FXStreet reported. The advance estimate showed the economy grew at a 3.4% annualised rate in the third quarter, above the 3.2% expected and up from 2.2% in the second quarter. CME FedWatch still showed about an 83% chance of a December rise.
Sticky inflation alongside faster growth kept the dollar firm. The dollar index traded around 102.30 and spot gold fell about 1.1% on the day to near $4,022, according to FXStreet, so the $4,000 area is now the level many desks are watching.
At 13:15 UK time the European Central Bank left its rates unchanged, with the deposit rate at 2.50% and the main refinancing rate at 2.65%. The statement said energy prices in the euro area had kept rising, an upside risk to inflation and a downside risk to growth. Earlier in the day the bank said President Christine Lagarde will step down on 7 February 2027, and The Irish Times reported that her departure overshadowed the decision. EUR/USD dipped about 0.4% to near 1.1110 in the first reaction, close to its 17 month low at 1.1113. Lagarde's press conference from 13:45 UK time is the next test for the euro, and we post the key lines on the Forexuro Telegram channel.
How we follow a data heavy Thursday
Days with PCE and a central bank decision in the same afternoon tend to bring fast moves in EUR/USD and gold. Size from the stop with the position size calculator, and use the gold position size calculator when the market is XAU/USD. Trading carries risk, so only use money you can afford to put at risk.
Free signals go out every trading day on the Forexuro Telegram channel, usually between about 05:00 and 15:00 UK time. VIP adds more signals and alerts, full live management of every trade and priority support on Lifetime, for £99 a month or £549 one time.
Official sources
Official pages for the decisions, data and schedules behind this report.
- Federal Reserve: FOMC meeting calendars, scheduled rate decision dates, statements and minutes.
- Bank of Canada: policy interest rate, the official record of Bank of Canada rate decisions.
- European Central Bank: monetary policy decisions, the official statements on ECB interest rate decisions.
- US Bureau of Economic Analysis: PCE price index, the official source for the Fed's preferred inflation gauge.
Frequently asked questions
What did the Fed decide on 28 October 2026?
The Fed held the federal funds range at 3.75% to 4.00% in a 10 to 2 vote. Two members preferred a quarter point increase, and Chair Kevin Warsh did not commit to a move in December.
What is on the market calendar for 29 October 2026?
US third quarter GDP and the September PCE price index at 12:30 UK time, then the ECB decision at 13:15 UK time and the press conference at 13:45. The Bank of Japan follows on Friday 30 October.
Where was gold trading after the Fed?
Spot gold was near $4,078 during the press conference on Wednesday, then eased to about $4,040 in Asia and close to $4,034 in early London trade on Thursday.
What did the Bank of Canada do on 28 October?
It raised its overnight rate by a quarter point to 2.50%, the first increase since July 2023, and said a further rise could be needed.
How did markets react to the UK Budget?
Calmly. Headroom was put at £15 billion for 2029/30, the 10 year gilt yield fell about 2 basis points to near 5.32% and sterling was little changed near $1.3295.
Sources
- Kitco: Gold steadies as the Fed holds rates and two officials favour a hike
- investingLive: Americas FX news wrap, 28 October
- CNBC / Reuters: Gold and Warsh comments after the Fed hold
- FXStreet: Gold corrects after a three day winning streak
- Investing.com: Asian currencies mixed as the dollar steadies after the Fed hold
- CNBC / Reuters: Oil prices fall as peace hopes offset Middle East fears
- The Globe and Mail: Canadian dollar strengthens after the BoC hike
- Reuters via Euronext: British markets take Healey's first Budget in their stride
- FXStreet: Gold drops 1% as US PCE inflation strengthens the case for a December Fed hike
- FXStreet: European Central Bank leaves key rates unchanged in October
- The Irish Times: ECB holds rates steady as Lagarde's departure overshadows decision
- Data for the charts: Swissquote spot gold, CNBC and Investing.com reports for oil and the dollar index; times from the BEA, ECB and Bank of Japan calendars.
Keep reading
XAU/USD today · EUR/USD today · FOMC rate decision · ECB rate decision