The DXY Index continues to perform well, reaching 3-month highs of 104.20 as recent dollar strength supports the greenback.
Today the Fed Beige Book will be released, providing useful economic data that will steer the Fed rate cut decision on Nov. 7.
EURUSD is hovering in the 1.0800 range, trading below the key 200-day SMA at 1.0870.
ECB officials emphasised the need to reduce euro zone inflation to their 2% target, with President Lagarde confidently stating that inflation would sustainably reach their target by 2025 or even sooner.
Another ECB member commented, “If there are no upside surprises to inflation, then we could and should continue lowering interest rates, ” providing a clearer indication that a cut will happen in their next meeting as long as ongoing data backs their views.
Cable starts the day around 1.2980, with the pound facing headwinds from declining inflation data and weaker labour market data.
Yesterday, BoE Governor Andrew Bailey spoke about the need for the BoE to monitor developments in the less transparent non-banking system, and improve abilities to track financial activities outside the traditional banking sector.
World News
Bank of Canada is announcing its interest rate decision today, with a consensus of a 50bps cut from 4.25% to 3.75% as the BoC looks to keep in pace with the Fed’s interest rate cycle.
The yen continues to drop against the dollar, reaching levels not seen since July.
Currently trading at 152.40, yen weakness comes from a surge in global yields amid US election risks and Fed caution concerning interest rate cuts.
With the yield gap widening between the two countries, there is momentum for further yen weakness and dollar strength. Based on recent instances, market experts suspect the Japanese authorities will step in to prevent larger losses.
