US Dollar Strengthens on Hawkish Fed Outlook

A stronger-than-expected US Consumer Price Index (CPI) reading bolstered expectations for aggressive Federal Reserve policy, lifting the US Dollar against most major currencies. Hawkish commentary from a Fed official and a poll showing unanimous economist expectations for a December rate hike further supported the dollar's strength. The rising greenback exerted pressure on the Euro, British Pound, and Australian Dollar, with some reports suggesting a larger 50-basis-point Fed hike could be considered.

European and UK Central Banks Maintain Tightening Bias

Central banks outside the US also signaled a commitment to tightening monetary policy in the face of inflation. A European Central Bank official described a December rate increase as "obvious," while a Bank of England deputy governor warned that the balance of risks for inflation remains to the upside, citing high energy costs.

Falling Oil Prices Influence Currencies and Bonds

Falling oil prices, reportedly linked to diplomatic developments between the US and Iran, influenced various asset classes. The decline in energy costs was cited as a supportive factor for UK gilts and India's terms of trade. However, lower oil prices also contributed to pressure on the commodity-linked Canadian Dollar.

New Gold Mine Commences Production in Ethiopia

On the supply side, Allied Gold announced it has poured the first gold from its new Kurmuk mine located in Ethiopia. The new operation is a key part of the miner's strategy to increase its overall production from its African assets by 2029.