Markets reload on USD

Market reports
Thanim Islam
  • US inflation comes in higher, sparking demand for USD
  • UK GDP doesn’t take away from UK recession outlook
  • Risk aversion set to lay precedence on markets
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US inflation came in higher than expected yesterday, causing longer term treasury yields to climb once again, equities to drop, and USD to bounce back retracing 50% of the previous 6 days of losses. On the back of equities dropping, both EUR and GBP also slumped.

UK GDP came in line with expectations for the month of August at 0.2%. But nonetheless, this was not seen as a positive, with the market consensus that the UK will fall into a recession by the end of the year. UK GDP in September will have to be 0.4% to avoid negative growth for the third quarter.


Market rates

* Daily move - against G10 rates at 7:30am, 13.10.23

** Indicative rates - interbank rates at 7:30am, 13.10.23

Data points


  • GBP: BoE Bailey, Cunliffe
  • EUR: ECB Lagarde
  • USD: Fed Harker

Our thoughts

Plenty of speakers from central banks today, as well as the sentiment figures from the University of Michigan. But following on from yesterday's big moves on those inflation numbers, as well as risk aversion on geopolitical tensions, we would expect yesterday's moves to continue. It seems that the longer term trend of USD gaining is set to gain traction again.

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