Section
The latest forex coverage from the TrustFinance editorial desk.
The British pound held steady after July's inflation rate of 2.9% aligned with market expectations, tempering the outlook for aggressive Bank of England rate hikes. Investor attention now turns to the release of the Federal Reserve's latest meeting minutes.
The Canadian dollar strengthened to its highest level since early June, supported by better-than-expected domestic manufacturing and wholesale figures, coupled with a decline in the U.S. dollar following weak retail sales data.
The U.S. dollar extended its decline to multi-month lows after the Treasury Department doubled its buyback limit for long-term bonds, a move that successfully cooled a surge in yields and narrowed the greenback's rate advantage.
A renewed sell-off in U.S. government debt pushed long-term borrowing costs back toward multi-decade highs, reversing a brief rally in Asian and European sovereign bonds amid persistent inflation and supply concerns.
Bank of America maintained its bullish forecast for the euro, projecting it will reach 1.15 against the dollar by year-end, while lowering its outlook for the greenback against the Japanese yen and Canadian dollar.
Bank of America strategists are advising clients to short the Norwegian krone against the Swedish krona, citing accelerating growth in Sweden and a more hawkish central bank outlook compared to a cooling Norwegian economy.
The British pound and the euro gained against the U.S. dollar after an unscheduled U.S. Treasury announcement to increase bond buybacks triggered a drop in Treasury yields and a broad dollar sell-off.
Bank of America analysts are flagging potential near-term weakness for the U.S. dollar and upside for the euro, while revising forecasts for the Japanese yen and Canadian dollar based on shifting central bank dynamics.
Bank of America analysts have issued a recommendation to sell the Norwegian krone against the Swedish krona, citing diverging economic data and shifting central bank rate hike probabilities as key drivers for the trade.
