Forex Today: Risk appetite pressures the greenback
What you need to know on Thursday, October 21:
The greenback remained under selling pressure and shed ground against all of its major rivals, including that considered safe-haven. The American dollar enjoyed from some temporal demand early in the European session, as US government bond yields jumped to fresh multi-month highs, with the yield on the 10-year Treasury note peaked at 1.673%, but retreated toward 1.64%. Earlier in the year, the yield moving past 1.70% used to trigger sharp dollar’s demand.
The EUR/USD pair trades around 1.1650, posting a modest intraday advance. European Central Bank policymaker Francois Villeroy repeated that current inflation spikes are expected to be temporary. The EU released the final version of the September Consumer Price Index, which was confirmed at 3.4% YoY in September, while the core annual reading printed at 1.9%, validating the European Central Bank’s wait-and-see stance.
GBP/USD finished the day above 1.3800 despite mixed UK inflation data. The Consumer Prices Index came in at 3.1% YoY in September when compared to 3.2% recorded in August. The core reading fell to 2.9% YoY last month from 3.1% registered in August, falling short of the consensus forecast of 3.0%. The BOE is anyway expected to raise rates sooner rather than later, which helped to keep the pound afloat.
Commodity-linked currencies reached fresh multi-month highs versus the greenback. AUD/USD trades around 0.7520, while USD/CAD pressures the 1.2300 mark. The USD/JPY pair ticked lower and settled at 114.26.
Gold posted a third consecutive higher high on a daily basis and settled at around $1.784 a troy ounce. Crude oil prices dipped ahead of the US opening but ended the day at fresh multi-year highs. WTI settled at $83.25 a barrel.
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