The U.S. dollar is strengthening

The U.S. dollar held a narrow range in early European trading Thursday, ahead of the hotly anticipated U.S. inflation data release. The sterling fell as the Bank of England’s emergency bond-buying program finished.

The dollar, which measures the value of the U.S. dollar against a basket of six other currencies, rose 0.1% to 113.3312, maintaining close to a 20-year high.

The dollar is still in demand after minutes from the Federal Reserve’s September meeting revealed that policymakers unanimously agreed on the need for additional monetary tightening to battle inflation.

Thursday’s main attention will be the release of the most recent U.S. inflation statistics, likely to indicate that annual CPI inflation remained above 8,3% in September, holding close to a 40-year high reached earlier in 2022.

GBP/USD declined 0.3% to 1.1068, with sterling giving back some of Wednesday’s gains due to uncertainty. Bank of England Governor Andrew Bailey announced earlier this week that the central bank would stop providing emergency bond assistance at the end of this week. However, with Britain’s government borrowing prices reaching 20-year highs and the incoming U.K. government appearing dedicated to its spending plans, Bailey is expected to face pressure to reverse his decision.


The EUR/USD fell to 0.9702 after German consumer inflation data reaffirmed strong levels in September, 10.9% higher year on year compared to other European countries.

USD/JPY declined 0.1% to 146.821, close to the August 1998 high of 147.644 and well above last month’s high of 145.90, which prompted Japanese authorities to intervene to buy the yen.

The AUD/USD lost 0.1% to 0.6272 after falling to a two-and-a-half-year low of 0.6235 in the previous session, while the NZD/USD fell 0.1% to 0.5596, slightly above its lowest level since March 2020.

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