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Currency Market Analysis

May 11, 2018 | Currency Market Analysis

Global Themes

Inflation misses

A miss in US inflation derailed the US dollar’s recent run higher.

The US dollar has climbed rapidly higher over the last month as better US data and a more optimistic tone from the US Federal Reserve boosted the greenback.

Last night’s poor inflation reading, which saw core inflation up by just 0.1% in April, pressured the USD as markets quickly took profits after the US dollar gains.

The USD index fell 0.5% in its biggest one-day fall since 21 March.

Pound falls after BoE

The USD fell 0.6% versus the RMB while USDHKD was also lower.

The GBPHKD fell 0.2% after last night’s Bank of England meeting kept UK interest rates on hold.

Draghi speaks

Tonight’s focus shifts to Europe with a major speech from European Central Bank president Mario Draghi due at 9.15pm.

Next week, European inflation and Australian employment figures will be the key events.

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