Euro keeps pressure on the dollar, Sterling inches back as week comes to a close
Proactive Investors
Published Dec 02, 2022 08:04
Euro keeps pressure on the dollar, Sterling inches back as week comes to a close
Proactive Investors - After reaching 15-week highs of 1.230 against the US dollar on Thursday, Sterling has cooled off slightly while still remaining in a leading position heading onto the week’s end.
As it stands, Cable is changing hands at 1.223, having dipped around 22 pips in the Asia trading window.
The pair’s cooling off aligned with tepid UK retail sales, which decreased 6.1% year on year according to this morning’s reading, marking a sixth consecutive month of falls in retail sales as the cost of living crisis and high prices continue to compress consumer budgets.
Sterling enters the 2022 come stretch in a strong position against the greenback – Source: tradingview.com
Losses on the GBP/USD pair may have been exasperated further if not for a weak US Dollar Index (DXY), which has plummeted nearly 200 basis points to 104.17 since Monday.
Sterling also cut back slightly against the euro this morning, with the EUR/GBP pair currently changing hands at 0.859p against an opening price of 0.858p.
UK 10-year gilt yields are sticking close to the 3.1% level, certainly an improvement on the 14-year highs experienced in October.
High-than-expected producer price inflation across the euro area pushed EUR/USD another 0.1% higher in today’s Asia session, bringing the pair to a four-month high of 1.053.
That PPI data will be used by the euro hawks to justify more jumbo interest rate hikes in the coming months.
US unemployment is expected to come in at 3.7% when the reading is released this afternoon but with no further headline readings scheduled on today’s economic calendar, price action could be relatively subdued as the week comes to a close.
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