The U.S. Dollar Is Strengthening
The U.S. dollar held a narrow range ahead of the U.S. inflation data release. As the emergency bond-buying program ended, the sterling fell.
The dollar index measures the value of the U.S. dollar against a basket of six other currencies. It rose 0.1% to 113.3312, keeping close to a 20-year high.
After minutes from the Federal Reserve’s September meeting, the dollar is still in demand, which revealed that policymakers unanimously agreed on the need for additional monetary tightening to battle inflation.
Thursday’s main attention will be the release of the most recent U.S. inflation statistics. This will likely indicate that annual CPI inflation remained above 8,3% in September. It held close to a 40-year high reached earlier in 2022.
GBP/USD declined 0.3% to 1.1068, with sterling giving back some of Wednesday’s gains due to uncertainty. Bank of England Governor Andrew Bailey announced earlier this week that the central bank would stop providing emergency bond assistance at the end of this week. However, with Britain’s government borrowing prices reaching 20-year highs and the incoming U.K. government appearing dedicated to its spending plans, Bailey should face pressure to reverse his decision.
The EUR/USD fell to 0.9702 after German consumer inflation data reaffirmed strong levels in September. The value was 10.9% higher yearly than in other European countries.
USD/JPY declined 0.1% to 146.821, close to the August 1998 high of 147.644 and above the high of 145.90. Therefore, Japanese authorities intervened to buy the yen.
The AUD/USD lost 0.1% to 0.6272 after falling to a two-and-a-half-year low of 0.6235 in the previous session, while the NZD/USD fell 0.1% to 0.5596, slightly above its lowest level since March 2020.