UK inflation on the agenda in the session ahead

There were some light moves in Asia but major currencies have reverted back to keep little changed overall. You can check out the summary of the moves here as recapped by Eamonn. And here’s a snapshot of the FX space as we look towards European trading:

The dollar remains poised on the week with EUR/USD testing waters below 1.0900 now while USD/JPY is holding thereabouts above 149.00, following a slight decline yesterday. The antipodeans remain on the softer side amid a stronger dollar but also as China uncertainty creeps in since the holiday break. AUD/USD is hovering in and around its 100-day moving average at 0.6693 currently, so that’s a key level to watch in the day ahead.

Looking to European trading, there won’t be too much on the data front. But the main focus will be the UK inflation report for September.

As things stand, traders are pricing in ~80% odds of a 25 bps for the 7 November BOE policy decision. And much of that will rest on the inflation numbers we get today.

The estimates show that core annual inflation is expected to ease to 3.4%, down from 3.6% in August. So, that will be the main thing to keep an eye out for. Meanwhile, headline annual inflation is also expected to fall back below the 2% mark for the first time since April 2021. But again, the core measure and services inflation are the key items to be mindful of.

0600 GMT – UK September CPI figures0800 GMT – Italy September final CPI figures1100 GMT – US MBA mortgage applications w.e. 11 October

That’s all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.

This article was written by Justin Low at www.forexlive.com.