The strengthening momentum of the US dollar continued in the European session, showing the giant currency remained traded higher against its main rivals.
The strengthening US dollar moved in tandem with US 10 -year bond yields rising to a two -year high of 1.89%, following market optimism for an interest rate hike by the Federal Reserve (Fed).
At the time of writing, the dollar index is trading higher at around 95.60 against most major currencies.
After scrutinizing UK inflation data published earlier in the session, the pound began to find support to rise in hopes the Bank of England (BOE) would act once again to raise rates in December.
Being the focus of investors now is BOE Governor Andrew Bailey’s speech tonight to get clues for the next interest rate setting.
Meanwhile, the euro traded flat as its movement was limited by the strength of the greenback dollar.
Risk -sensitive currencies, the Aussie dollar and kiwi traded slightly higher during the European session after showing gloomy performance in the previous session as they were pressed by a strong US dollar.
Heading into the opening of the New York trading session, investors are also awaiting the release of Canadian inflation data which is expected to show a slight decline in December compared to the previous one.
