Sterling and euro recover; ECB likely to be aggressive after high German CPI



By Kevin Buckland

TOKYO, Sept 30 (Reuters) - Sterling rose to a fresh one-week high on Friday, helping to push the U.S. dollar index to a one-week low, as British policymakers moved to undo some of the damage caused by last week's tax-slashing, debt-swelling fiscal plan.

That puts the UK currency on course for its best week in 2 1/2 years.

The euro also jumped to a one-week peak after a heated German inflation reading reinforced expectations for more aggressive policy action from the European Central Bank (ECB).

The British pound touched $1.1222 early in the Asian session, taking it very close to erasing all of the precipitous losses in the aftermath of the new government's so-called mini budget last Friday. It was last up 0.41% at $1.11645, bringing its gain for the week to 2.87%, despite plumbing a record low of $1.0327 on Monday.

"The recovery in cable (the sterling-dollar rate) is very eye-catching," said Sean Callow, a strategist at Westpac in Sydney.

"It makes some sense in that UK yields are set to be high for some time, discouraging short positions. But with the UK already running very large current account deficits, we doubt there is much more upside in sterling."

Overnight, sterling jumped 2.13% as the Bank of England (BoE) conducted a second day of bond buying to stabilise markets, with gilt yields also rising.

Meanwhile, British Prime Minister Liz Truss and finance minister Kwasi Kwarteng will meet the head of the country's independent fiscal watchdog, the Office for Budget Responsibility (OBR), on Friday to discuss the budget forecast process.

Truss also vowed to stick with the controversial plans, in her first comments since the turmoil erupted in markets.

The OBR's involvement is "alleviating fears within the markets of the so-far uncosted fiscal package, helping support GBP," said Tapas Strickland, head of market economics at National Australia Bank.

"A hot German CPI print also serves as a reminder of the inflation situation in Europe - and globally - and that central banks need to remain hawkish. In such a light, the BoE's decision on Wednesday to purchase bonds should not be read as a pivot," Strickland added.

Data on Thursday showed German inflation at its highest in more than a quarter of a century, driven by high energy prices, with analysts warning that the energy crisis has yet to make itself fully felt.

The reading suggests the figure for the wider 19-country euro zone, due on Friday, is also likely to exceed economists' forecasts.

Markets are fully priced for another 75 basis point hike by the ECB next month, with 1-in-3 odds for a full percentage point bump. 0#ECBWATCH

For the BoE, traders predict 125 basis points of tightening in early November, with small odds for a 150 basis-point increase. 0#BOEWATCH

The euro EUR=EBS was slightly higher on Friday at $0.9821, and earlier rose to 0.9844, the strongest level in a week.

The shared currency remains on track for a 1.29% weekly advance, its best showing in four months, after recovering from a fresh two-decade low at $0.9528 from Monday.

The dollar index =USD , which measures the greenback against the euro, sterling and four other major peers, edged 0.09% higher to 111.91, but remained close to a one-week low of 111.64 reached overnight.

That was despite continued hawkish rhetoric from Federal Reserve policymakers, with Cleveland Fed President Loretta Mester saying on Thursday that "price stability is still job one," and inflation must be tamed before officials can worry about the impact on economic growth.

The dollar appreciated 0.14% to 144.65 yen JPY=EBS , but is mostly tracking sideways below the psychological 145 line since Japanese officials stepped in to conduct their first yen buying intervention since 1998 last week, when the dollar popped to a fresh 24-year peak at 145.90 yen.

Finance Minister Shunichi Suzuki signalled on Thursday his readiness to intervene again if speculative currency moves persist.

Japan's government will confirm later on Friday the amount it spent on the intervention, and the amount it has left in reserve for further such action.

Elsewhere, the dollar jumped 0.38% to 7.1247 yuan in the offshore market CNH=D3 , putting it on track for both its best week and month since April.

The Aussie AUD=D3 slipped 0.08% to $0.6495, and New Zealand's kiwi NZD=D3 weakened 0.12% to $0.5721, also leaving both on course for their worst monthly performances since April.



World FX rates Link



Reporting by Kevin Buckland

Isenção de Responsabilidade: As entidades do XM Group proporcionam serviço de apenas-execução e acesso à nossa plataforma online de negociação, permitindo a visualização e/ou uso do conteúdo disponível no website ou através deste, o que não se destina a alterar ou a expandir o supracitado. Tal acesso e uso estão sempre sujeitos a: (i) Termos e Condições; (ii) Avisos de Risco; e (iii) Termos de Responsabilidade. Este, é desta forma, fornecido como informação generalizada. Particularmente, por favor esteja ciente que os conteúdos da nossa plataforma online de negociação não constituem solicitação ou oferta para iniciar qualquer transação nos mercados financeiros. Negociar em qualquer mercado financeiro envolve um nível de risco significativo de perda do capital.

Todo o material publicado na nossa plataforma de negociação online tem apenas objetivos educacionais/informativos e não contém — e não deve ser considerado conter — conselhos e recomendações financeiras, de negociação ou fiscalidade de investimentos, registo de preços de negociação, oferta e solicitação de transação em qualquer instrumento financeiro ou promoção financeira não solicitada direcionadas a si.

Qual conteúdo obtido por uma terceira parte, assim como o conteúdo preparado pela XM, tais como, opiniões, pesquisa, análises, preços, outra informação ou links para websites de terceiras partes contidos neste website são prestados "no estado em que se encontram", como um comentário de mercado generalizado e não constitui conselho de investimento. Na medida em que qualquer conteúdo é construído como pesquisa de investimento, deve considerar e aceitar que este não tem como objetivo e nem foi preparado de acordo com os requisitos legais concebidos para promover a independência da pesquisa de investimento, desta forma, deve ser considerado material de marketing sob as leis e regulações relevantes. Por favor, certifique-se que leu e compreendeu a nossa Notificação sobre Pesquisa de Investimento não-independente e o Aviso de Risco, relativos à informação supracitada, os quais podem ser acedidos aqui.

Usamos cookies para lhe dar a melhor experiência no nosso website. Ler mais ou alterar as configurações de cookies.

Aviso de risco: O seu capital está em risco. Os produtos alavancados podem não ser adequados para todos. Recomendamos que consulte a nossa Divulgação de Riscos.