The global stock markets climbed off the lows of yesterday's session. At the same time, the dollar edged lower for the second consecutive day but set for a winning week as investors showed positive reaction to the European Central Bank's decision to slow its emergency bond purchases in the fourth quarter.
Dollar index hovers above firm Support
DXY corrective downside appears to find some support near 92.26, despite continued bearish sentiment around the greenback amid elevated risk appetite.
The sentiment is still constrained by Delta concerns. It might act as a reasonable incentive for the dollar bears. At the same time, worries about a slowdown in American economic recovery have slightly eased after the recent Initial jobless Claims report fell to 18 months low.
The sterling strengthened after traders digested the unexpectedly weak UK GDP report. According to data released on Friday, the country's economy grew just 0.1% in July, down from 1.0% growth in June.
It is expected that the Bank of England will raise interest rates by the end of 2022. It is projected that Bank Rate will increase to 0.25% in the fourth quarter of 2022 from its current record low of 0.10%. The oil price climbs higher on Friday towards $73 per barrel, assisted by signs that US-China trade hopes kept riskier assets elevated and signs that supply is tightening in the US following Hurricane Ida.
Events of the day
Investors will await Producer Price data for August on Friday at 15:30 EEST, providing insight into inflation pressure. The largest annual increase in over a decade was reported in July due to a demand-supply imbalance caused by the quick economic recovery.
Canada employment change in August is due to be released at the same time, which is expected to climb to 100K and print higher figures than a month prior.
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