Dollar maintains strong position
Yesterday we saw the dollar continue to hold the upper hand against a backdrop of US core-PCE inflation rising to its highest level in 30 years as well as a raft of positive results from various metrics – including GDP being revised slightly higher for Q3 and weekly initial jobless claims declining as well. USD gained around 0.5% throughout the European session.
The only data release of note yesterday from a euro perspective was the German Ifo, which fell for the 5th month in a row as expected. From a newsflow perspective, yesterday the coalition of the SPD, Greens and FDP agreed to form a government in Germany – the euro reaction to the announcement was limited however.
Overnight, the dollar handed back some of its gains despite a more hawkish bias to the Fed minutes. This morning, EUR/USD opened just above the $1.12 mark, GBP/USD is operating at the midpoint $1.33-1.34 and EUR/GBP continues to trade around the 84p mark.