Daily Forex Analysis

The US dollar remained firm as elevated inflation and hawkish Federal Reserve commentary reinforced expectations for further interest rate increases. 

Surprising US inflation and hawkish Federal Reserve commentary reinforced expectations for further monetary tightening, pushing the probability of a December rate hike to 91%. 

Rising expectations for a December Federal Reserve rate hike weighed on precious metals as investors awaited key US inflation and employment data. 

Declining oil prices supported precious metals as progress in US-Iran diplomatic talks eased inflation concerns, lifting gold above $4,100 and silver past $52. 

Markets turned cautious ahead of the US employment report as a renewed technology stock selloff and post-midterm political uncertainty weighed on sentiment. 

The US dollar weakened following the sweep of Democracts in the midterm elections, while renewed hopes for a resolution to the US-Iran conflict pushed oil prices lower and eased inflation concerns. 

Early US midterm results pointed to Democrat gains, raising prospects of a divided government, political gridlock, reduced spending, and tighter AI regulations. Fiscal uncertainty weakened the dollar, supporting major currencies and precious metals. However, the S&P 500 has risen one year after every midterm since 1946, suggesting limited long-term market impact.

Washington launched limited defensive airstrikes on Iran's Qeshm Island following an Iranian missile attack on a U.S. aircraft, while Iranian media confirmed the blasts and President Trump adopted a milder tone despite earlier warnings.