What you need to take care of on Thursday, October 13:
The US dollar ended Wednesday little changed, despite some noise from major central banks. Investors are waiting US Inflation Datawhich could provide new clues about the next direction the US Federal Reserve will take
Bank of England (BOE) Governor Andrew Bailey was on the wires again this Wednesday amid the latest emergency program. Rumors that the central bank could extend its latest emergency foundation program beyond this week sparked risk appetite early Wednesday, although the BOE was quick to deny such a possibility, sending investors back to the American dollar. Bank of England chief economist Huw Pill later noted that he believed a “significant” monetary policy response would be needed in November.
UK Prime Minister Liz Truss is aiming to go ahead with the mini budget, despite criticism over the £60billion funding hole. Truss repeated that she would not cut public spending, despite tax cuts and soaring inflation.
In the middle of the American afternoon, the United States The Federal Reserve released the minutes from the last meeting. Policymakers reiterated their determination to maintain tight monetary policy to control high inflation. Additionally, officials said that once they reach what they consider a restrictive level, “it would be appropriate to maintain it for some time.”
The restrained volatility could be blamed on the next US consumer price index report. Inflation is expected to have risen to 8.1% year-on-year, down slightly from the previous 8.3%. Core inflation, on the other hand, should have increased towards its recent multi-decade high of 6.5%. Additionally, Germany will release the final estimate of its September CPI, which is forecast stable at 10.9% in its harmonized EU version.
Although far from investors’ radar, the coronavirus could soon become a theme in financial markets. China’s zero covid policy sees further lockdowns in the country, with Shanghai closing schools, bars, gyms and other venues. China is not alone, as Europe and the WHO have warned of a new wave entering Europe, which could be complicated by a resurgence of the flu.
EUR/USD remains stable around 0.9700, while GBP/USD was a bit more volatile, ending the day around 1.1100. USD/CAD is currently trading at 1.3810, while AUD/USD is at 0.6280.
The Japanese yen plunged against the greenback, with USD/JPY hitting a new multi-decade high at 146.96, holding onto its gain as the Bank of Japan refrained from intervening.
Gold rose and is trading around $1,675 per troy ounce, while crude oil prices extended their slide. WTI is now at $87.20 a barrel.
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