The DXY Index has climbed above 103, reaching its strongest level since August.
The Index rose by 0.4% after former President Donald Trump defended proposals to raise tariffs on foreign imports. Increased expectations of a Trump win for the US election have caused markets to price in a Trump win, with his planned trade policies generally supporting the dollar.
The Mexican peso was impacted the worse by this news, dropping by 1.7% against the dollar and expecting further losses if these trade strategies are implemented.
EURUSD stayed below 1.09, holding its position after a four-day losing streak. With the ECB rate call tomorrow, the Euro will face downward pressure as the ECB is widely expected to cut by 25 bps. Economists have locked in a 97.3% chance of a 25 bps cut.
Cable is trading below 1.30 after UK inflation data came out worse than expected. The pound fell by 0.4% versus the greenback after reports that inflation fell by 1.7% in September, compared to 1.9% expectations.
Inflation has slipped below the BoE’s 2% target for the first time in 3.5 years, increasing the odds for an interest-rate cut next month. The drop in inflation was due to cheaper petrol and air fares, along with lower-than-expected services inflation.
World News
NZDUSD fell by 0.7% to 0.6040, the lowest since August. There is roughly a 40% likelihood that the RBNZ will cut by 75bps next month as the bank is looking to cut more aggressively.
