The euro strengthened against a receding dollar. However, ECB policy maker Francois Villeroy de Galhau noted on Tuesday that there was no reason for the ECB to consider a rate hike between now and the end of next year. This limited the upside potential of the EUR/USD.
The pound rose strongly after Bank of England governor, Andrew Bailey, hinted at a rate hike to contain rising inflation in the UK. Prime Minister Boris Johnson vowed to resolve the dispute with the EU over the Northern Ireland Protocol.
The USD/JPY further advanced to its highest level since late-2018 and consolidated above 114. Overall, the US dollar index dropped, especially after disappointing industrial production data released on Tuesday tempered hawkish expectations for the next Fed meeting (in early November).
The gold price rose exhibiting very high volatility. On Tuesday, it traded around $1,780.
US stock indexes rose as the earnings season gets into full swing. Big investment banks reported excellent quarterly results last week, while electric car maker Tesla is expected to disclose financial reports on Thursday.
Oil prices continued to climb as global demand is still contributing to energy shortages across the world. Widening power crunch, shortages of coal and natural gas, and cold weather in the Northern hemisphere are pushing oil prices higher. On the other hand, OPEC+ countries are happy with the existing situation as their dollar revenues have increased dramatically.