On Friday, the statistical center Eurostat announced that inflation in the euro zone reached 10% in September and broke a historical record since there were records, created in 1997. This data reinforces the expectation that the European Central Bank (ECB) will once again apply a rate hike of 0.75 basis points as the last, although some risk which will be higher. The low unemployment rate also fueled these expectations.
The pound sterling also down as end-of-quarter demand buoyed the dollar, but headed for its best week against the greenback in two-and-a-half years as on Thursday the Bank of England intervened in the debt market to buy gilts for the second day. On Monday, the pound had hit an all-time low as markets were hit by the British government’s plan to cut taxes and pay for them with more debt. This Thursday the Prime Minister, Liz Trussreaffirmed the path proposed despite the warnings from the IMF and the risk rating agency Moody’s about the impact on the activity of the proposed measures, in the face of an inflationary scenario and high rates.
The pound sterling it reached 1.1235 dollars, erasing its losses after the so-called mini-budget of the new government last Friday. Subsequently he operated with a loss of one 0.5% to $1.1066.
Volatility has spiked this week as investors worry about the pace of the eworld monetary tightening and the consequences of UK mini budgetand although the nerves calmed on Friday, few analysts believe that the situation is over.
The demand for the dollar in the derivatives markets was shot on friday to reach its maximum since the COVID-19 crisis in 2020. So far this year, the dollar has climbed a 17% against its rivals, including a 7.2% advance in the current quarter.
The dollar was trading stable against the Japanese currency, at 144.47 yenand has remained mostly below the psychological line of 145 units since the Japanese authorities carried out their first yen-buying intervention since 1998.
Source: Ambito
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