The US dollar gained strong support later in the day as risk appetite dipped with sharp losses for commodity currencies. On the positive side, the US University of Michigan consumer confidence index recovered marginally.
Sterling was unable to make any headway on Friday following the weaker than expected retail sales data. This was further compounded by a weaker tone surrounding risk appetite, especially after the US open as the FTSE 100 index dipped below the key psychological 7,000 level.
The headline Eurozone inflation rate was confirmed at 3.0% for September and the core rate at 1.6% with markets monitoring ECB rhetoric closely. ECB council member Kazaks stated that the inflation outlook is likely to be revised higher but still does not see that the 2% target is reached in a sustainable manner over the medium term.
The coming week will see five developed economy central banks give monetary policy updates. However, markets will be focused primarily on the US Federal Reserve (Fed) and the Bank of England (BoE) for clues on future policy and the prospect of tapering QE.
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