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USD strength pushes greenback to YTD highs

USD strength pushes greenback to YTD highs

Not much happened in the UK yesterday unless you’re Geffrey Cox. Sterling progress was hampered by uncertainty over a Bank of England rate hike in December and a lack of confidence in UK fundamentals.

Risk appetite was also slightly more cautious during the day given US consumer prices increased 0.9% for October, bringing the year-on-year rate to a 31 year high of 6.2%m, well above market expectations. The Pound peaked just above 1.3550 to the dollar before slumping to 1.3460 as the inflation data landed. The Euro also strengthened slightly to near 1.1700.

Overnight, RICS housing data held firm with prices again supported by supply shortages. At market open this morning UK GDP increased 0.6% for October, slightly above expectations, but quarterly data missed estimates, industrial data was weak and the trade deficit increased. Sterling briefly hit 2021 lows just below 1.3400 against the dollar in Asia before a slight recovery with the Euro little changed near 1.1700

Looking to today, UK GDP data was released earlier this morning, and as predicted confirmed that the recovery has lost momentum. However, the data has not impacted sterling so far. As we get underway this morning, the dollar strength continues with EUR/USD currently below $1.15, GBP/USD just above the $1.34 mark. Elsewhere, EUR/GBP continues to hold the midpoint of the 85-86p range.

France will be closed for Armistice day, the US is closed for Veteran’s day and Canada closed for Remembrance day. And we will mark Remembrance day at 11am too.

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