The Swedish inflation report this morning was a mixed bag. All in all, economists at ING expect the EURSEK to move back to the 11.00/10.90 area in the near term.Riksbank may go for 75 bps after all
“Headline inflation rose less than expected (from 10.8% to 10.9% YoY), CPIF inflation surprisingly declined (from 9.7% to 9.3%) but core CPIF rose (7.4% to 7.9%). Ultimately, the latter may matter more than the others for the Riksbank, which announces policy on 24 November, and that may tilt the balance towards a 75 bps rate hike.”
“Implications for the Krona should remain quite limited – today’s muted FX reaction to CPI was a case in point.” “We think SEK remains in a disadvantageous position compared to other procyclical currencies to benefit from an improvement in risk sentiment given the still clouded European outlook.”“We see room for a return toward 10.90/11.00 in EURSEK in the near term.”
EURUSD climbs to multi-month highs above 1.0400
EURUSD has gathered bullish momentum and climbed above 1.0400 for the first time since July. The upbeat ZEW sentiment data for Germany and the euro area help the Euro (EUR) find demand while the US Dollar stays on the back foot amid improving market mood.
GBPUSD climbs above 1.1850 despite weak UK data
GBPUSD has gained traction and advanced beyond 1.1850 on Tuesday. Although the UK data showed that the ILO Unemployment Rate rose to 3.6% in September, the pair didn’t have a difficult time pushing higher amid broad US Dollar weakness.
Gold clings to modest gains above $1,770
Gold price stretched higher and touched its strongest level since mid-August above $1,780 before retreating toward mid-$1,770s. With the 10-year US T-bond yield losing more than 1% on the day, however, XAUUSD manages to hold in positive territory.