Sterling Gains Slightly Against the Dollar
Sterling edged slightly higher against the US dollar during early European trading, reaching 1.3078, marking a modest 0.1% increase. However, the rally appears to have lost momentum, with the pound struggling to make significant gains.
The US dollar remains strong, bolstered by expectations of a 25 basis point interest rate cut by the Federal Reserve in November. This strength follows the release of minutes from the latest Federal Open Market Committee (FOMC) meeting, which suggested that the central bank would not be tied to a specific pace for future rate changes.
Yields on the 10-year US government bond remain elevated, staying above the 4% mark, the highest level since July 31. These high yields continue to support the dollar, making it difficult for the pound to gain further ground.
Despite this, the pound managed to recover slightly against the euro, rising by 0.2% to €1.1958 in early trading.
Modest Gains for Gold as Traders Eye US Inflation Data
Gold prices experienced a modest rise on Thursday as traders await critical US inflation data that could affect the Federal Reserve’s monetary policy.
At the time of writing, spot gold increased by 0.1%, reaching $2,614.45 per ounce. Similarly, US gold futures rose by 0.1%, climbing to $2,628.20.
Analysts predict that upcoming US inflation data will show a slight decrease in the headline Consumer Price Index (CPI), while core CPI is expected to remain persistently high for September. This ongoing inflation, paired with a strong labor market, reduces the chances of the Federal Reserve enacting significant interest rate cuts in the short term.
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