The U.S. consumer price index measure of inflation rose 0.1% month-over-month in July but failed to match expectations of a 0.2% rise as we had envisaged in our Australian dollar/U.S. dollar (AUD/USD) currency pair report earlier.
The war of words between Trump and North Korea has largely dictated the direction of the market for the past 24 hours. Safe havens, were the primary beneficiaries over the increased tensions, with Gold, the Swiss Franc, the Japanese Yen, and U.S. Treasuries rising across the board.
Sterling held above 1.32 against the dollar early Thursday as traders eagerly await the Bank of England's policy meeting today. Bond yields declined from July highs but remained elevated, as some market participants believe that the BoE may surprise, with a 25-basis point rate hike.
The fact that Sterling sharply depreciated across the board on Tuesday, after British inflation rates unexpectedly dropped to 2.6% in June, continues to highlight how the currency has become increasingly sensitive to monetary policy speculation.