Dollar Rebounds, Pound Drops Ahead of BOE Decision
The dollar rose versus all Group-of-10 peers, supported by higher US yields, while the pound weakened before a Bank of England policy decision.
Bloomberg Dollar Spot Index rises 0.3% as the Treasury 10-year yield is up by 3bps to 4.45%; US Treasury Secretary Scott Bessent said the Trump administration’s focus with regard to bringing down borrowing costs is 10-year Treasury yields, rather than the Fed’s benchmark short-term interest rate
Spot volumes are rather subdued, with options volumes at recent averages, a Europe-based trader says
GBP/USD snaps a three-day advance, drops as much as 0.6% to 1.2436; one-day hedging costs rally due to the BOE decision later Thursday and US payrolls data Friday
Overnight volatility rises by as much as 426bps to 16.52%, highest in more than two weeks; looking back at BOE decision days, this is the strongest reading since the August 2023 meeting
Policymakers are expected to lower their benchmark for a third time and downgrade their UK growth forecasts
Swedish krona rises versus most peers after data showed the country’s core inflation accelerated more than expected last month, dampening expectations in the market about further interest-rate cuts by the Riksbank
EUR/SEK set for fourth daily drop, pares 0.3% decline that took it to lowest since Oct. 15, trades down 0.1% on the day at 11.3317
EUR/USD down 0.5% to 1.0356; the ECB can continue to lower borrowing costs with inflation heading toward the 2% goal, Executive Board member Piero Cipollone said
Fresh estimates for the neutral rate will be published Friday
The yen rose after Bank of Japan board member Naoki Tamura flagged the need for two or more interest-rate hikes by early next year to contain upside risks for prices, yet the move lost traction
USD/JPY rebounds from 151.82 low, climbs 0.1% to 152.72
Sumber : Bloomberg
