US Dollar Rallies on Signs of Stubborn Inflation

US Dollar (USD) Jumps following Sticky CPI

The US Dollar (USD) strengthened yesterday after the latest American consumer price index exceeded expectations.

Rather than cooling as forecast, US headline inflation held steady in September. This boosted bets on another Federal Reserve rate hike this year, sending USD sharply higher.

Looking ahead, the University of Michigan’s October consumer sentiment index is out today. Could a deterioration in household morale sap the US Dollar’s strength?

Pound (GBP) Stalls following Disappointing GDP

The Pound (GBP) stumbled against its stronger peers on Thursday following lacklustre UK GDP data.

Although the UK economy grew by 0.2% in August, this was a rather weak rebound after July’s 0.6% contraction.

Sterling ends the week with no market-moving UK data due to be released. As a result, we may see GBP trade without a clear direction.

Euro (EUR) Firms amid ECB Minutes

The Euro (EUR) managed to move higher against its weaker peers yesterday, after the European Central Bank (ECB) meeting minutes were slightly more hawkish than expected.

The minutes showed signs of a split between policymakers at the bank, with indications that ongoing upside risks to inflation could potentially force the ECB to rethink further rate hikes in the future.

A weak industrial production release from the Eurozone could dent the Euro this morning. Later in the afternoon, ECB President Christine Lagarde could drive volatility with a speech.

Canadian Dollar (CAD) Boosted by USD Correlation

The Canadian Dollar (CAD) climbed yesterday as CAD was boosted by its positive trading relationship with the rising US Dollar.

With no Canadian economic data due out today, oil prices could affect the crude-linked ‘Loonie’. Will an uptick in oil lift CAD exchange rates?

Australian Dollar (AUD) Slides amid Souring Mood

The Australian Dollar (AUD) weakened again last night, extended yesterday’s slump, as a downbeat market mood sapped demand for the risk-sensitive ‘Aussie’.

New Zealand Dollar (NZD) Falls as PMI Misses Forecasts

The New Zealand Dollar (NZD) also declined overnight, with a risk-off mood and worse-than-forecast PMI result weighing heavily on the ‘Kiwi’.

Samuel Birnie

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