The Dollar is trading broadly flat (compared to yesterday’s close) ahead of the much-awaited inauguration of President-elect Joe Biden. The more risk-sensitive major currencies, including Sterling and the Australian and Kiwi Dollars are outperforming. In particular the Australian Dollar is up about 0.6% versus the US Dollar at time of writing, with the AUD/USD cross at its highest level since 15th January.
Sterling has also nudged higher against both the Dollar and a weaker Euro, with the GBP/EUR cross having this morning traded above 1.13 for the first time since mid-May. Sterling may have benefitted from the release of slightly stronger-than-expected CPI-inflation in December which will have further dented the risk of the Bank of England cutting its policy rate from an already record-low of 0.10%. UK core and headline CPI-inflation rose to 1.4% yoy and 0.6% yoy, respectively, from 1.1% yoy and 0.3% yoy in November.
