Greenback Claws Back Lost Ground

After being heavily weighed upon earlier in the week, the greenback clawed back some lost ground Thursday prompting the USD index to bounce further from Wednesday's multi-week low. In sympathy, GBP moderated after the currency enjoyed one of the best sessions in months as EU and UK negotiators met again in London to progress trade talks. GBP was one of the poorest performers in G10 as markets took profit, but steered well clear of revisiting the week's lows.

Equities were non-directional Thursday, with markets still awaiting any progress (or lack thereof) on fiscal aid in the US. House Speaker Pelosi continued to suggest a deal is possible before the election, but gaps clearly remain on state aid and liability provisions.

The Turkish central bank surprised markets by keeping policy unchanged against widespread expectations of a broad rate hike. The TRY responded by selling off sharply, hitting new alltime lows against the USD.

Focus Friday turns to global PMI data. The prelim October data is expected to a further slowing in the Eurozone services sector, while US data is seen showing the economy grew at a similar pace in October. BoE's Ramsden is due to speak.