Global market watch - 19th October 2021
Sterling eased off 20-month highs against the euro yesterday as the single currency rebounded against the dollar. The pound has climbed to one-month highs against the dollar this morning, following EUR/USD higher. Next focus for traders is UK CPI inflation data, due tomorrow morning.
The euro had one of its best sessions in a while yesterday afternoon, and climbed across the board on improving risk appetite. In the absence of any major data, EUR/USD will probably continue to follow risk sentiment today as well.
A recovery in risk appetite weighed on the safe haven dollar overnight, as stock markets in Asia followed US markets higher. Meanwhile, data showed that US industrial production fell short of expectations in September, dropping 1.3%. Global supply chain issues continued to weigh on output, as shortages of semiconductors caused motor vehicle output to fall significantly.
The Aussie dollar gained slightly overnight despite dovish minutes from the Reserve Bank of Australia. The RBA said that while wage pressures were emerging in certain parts of the world, this was not the case in Australia. The RBA continues to signal no rate hikes until 2024, even though the market is expecting a first hike by the end of 2022.