Investing.com — Sterling traded higher on Wednesday while the euro slipped, lifted by hotter-than-expected UK September inflation data at 3.5% alongside a broader softening of the greenback and sliding oil prices.
Sterling jumped 0.07% against the dollar to 1.3392, while the euro slipped 0.19% to 1.1215, at 05:10 ET (09:10 GMT).
The dollar continues to trade with a soft undertone. “That, to us, is a mix of some aftereffects of AI-related concerns and stretched longs and short-term overvaluations being unwound,” said Francesco Pesole, FX strategist at ING.
Pesole added that lower oil prices show renewed potential to damage the greenback, noting that “a short-lived drop in Brent on unconfirmed reports of Middle East negotiation progress was enough to send DXY briefly to 101.50”.
The U.S. calendar is quiet today following yesterday’s drop in housing starts. On monetary policy, Federal Reserve Governor Christopher Waller maintained a hawkish stance by signaling openness to further tightening if data warrants, while Vice Chair for Supervision Michelle Bowman held a steady neutral posture ahead of upcoming inflation and employment catalysts leading into the October 27–28 FOMC meeting.
While the headline September inflation acceleration to 3.5% and core services rise to 3.7% reinforce expectations for a November Bank of England hike, analysts stress the pound’s strength is heavily propelled by external dollar weakness rather than pure domestic momentum. I
NG Global Head of Markets Chris Turner noted that upcoming fiscal budget expectations remain a key domestic watchpoint, stating that markets are pricing in an event that “won’t deliver any real surprises.”
For the single currency, political jitters in France weigh as the 10-year OAT-Bund spread widened to 157 basis points ahead of Friday’s Moody’s credit rating review.
ING maintains a technical view looking for EUR/USD consolidation in the 1.120–1.125 range near-term, while highlighting EUR/CHF as the key exhaust valve for French risk, where support emerged near 0.9230 close to the 200-day moving average.
ING eyes NZD/USD trading above 0.570 into year-end, while broad EUR/HUF remains anchored in a 362–364 range.
To shift this bearish-dollar and resilient-sterling view, markets would require a sharp resurgence in US inflation data or a severe escalation in geopolitical energy shocks to reverse the greenback’s soft momentum.
Original Article
Sterling today: Pound climbs on hot UK CPI as dollar weakens
Dollar holds near 3-week low; euro and yen consolidate as markets gauge Iran war
French yields hover near 2002 highs; hotter UK inflation sparks gilt pressure
