FX Update: The dollar has traded mostly softer
FX Update: The dollar has traded mostly softer so far today, which has put EUR-USD back above 1.1100, although USD-JPY recovered above 104.00 from a low of 103.68. The weakness in the greenback follows remarks by Fed vice chairman Fischer, who said that slow productivity growth, demographic changes and weak investments are drivers of persistent low interest rates. Sterling managed to rally, with Cable spiking to a 1.2273 high during the early Asia-Pacific session after closing in New York at 1.2181. There didn't appear to be any specific news catalyst behind the pop in the pound, with market talk attributing it to a stop-loss driven short squeeze ahead of UK inflation data today, which is expected by markets to jump to 0.9% y/y in the headline CPI reading for September, up from 0.6% in August, as the impact of currency weakness starts to be seen. The NZ dollar rallied following a warmer than expected New Zealand CPI data for Q3, which rose 0.2% q/q and by 0.2% y/y, versus respective median forecasts for 0.0% and 0.1% y/y. NZD-USD clocked an 11-day high of 0.7198, although the general prognosis is that the CPI data is consistent with RBNZ projections, and that the central bank is still likely to cut its cash rate 25 bp to 1.75% in November.