Two key themes overnight have been a sell-off of global bond markets and USD strength. The USD has strengthened by about 0.3%, reaching a fresh 7-month high on a major currency TWI basis.
The Swedish Krona is the worst performer, down 1.9% after a dovish policy Statement by the Riksbank.
Of the commodity currencies, the AUD has fared the worst, falling 0.8% to back below the 0.76 mark. On a number of occasions over the past couple of months it has broken up through 0.77, as it did a couple of days ago, but never spent much time above that level. There was no fresh news to drive the fall.
Commodity prices have performed well overnight considering USD strength. Oil prices rose after Reuters reported that Saudi Arabia and its Gulf OPEC allies are willing to cut 4% from their peak oil output.
The fall in the AUD comes after a period of outperformance – the AUD is still the second best performing major currency this month, second to the USD.
The NZD is down about 0.5% to 0.7120, currently close to its lows for the day around the 0.7110 mark.
CAD has managed to maintain its ground against the USD, a reflection of the higher oil prices and reports that an EU-Canada trade agreement is a step closer, after one Belgium province that was holding up the deal will now sign up to the proposed pact.
There were a series of positive economic releases for the UK, with stronger-than-expected GDP growth in Q3, a positive retail survey indicator and Nissan committing to build two new car models at its UK factory. Despite all that, GBP has still managed to fall and is down 0.6% to 1.2170, while EUR has barely slipped and trades around the 1.09 mark.
The yen has been on a one way track lower, which sees USD/JPY up to 105.30, its highest level since the end of July. Japan CPI data out later today is likely to continue to show inflation remaining well below target and uncomfortably low for the BoJ.
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