Caution Dominates Amid Reflection On Inflation Dynamics, Aussie Jobs Data

The AUD reversed initial gains after the release of Australia's most recent jobs market report. The unemployment rate climbed more than expected, as full-time job losses resulted in a surprise contraction in total employment. Market reaction may have been limited by the fact that the uptick in the unemployment rate was partly driven by wider participation, as lockdown restrictions were eased across Australia.

• The greenback was in demand, following the release of U.S. CPI data on Wednesday, which showed that inflation accelerated to the fastest pace in more than two decades. The DXY extended gains to best levels since Jul 23, 2020, but rejected the 95.00 figure.
• Inflation worry translated into a broader cautious feel, which became evident even as regional headline flow was relatively subdued. High-beta G10 FX traded on a softer footing as a result.
• Cable probed the water below the $1.3400 figure for the first time since Dec 2020, ahead of the release of preliminary Q3 GDP report and monthly economic activity indicators out of the UK.
• Apart from aforementioned UK data, speeches from ECB's Makhlouf, Lane, Schnabel & de Cos as well as BoE's Mann take focus from here. The U.S. observes a public holiday.