In advance of US inflation statistics anticipated to suggest the ferocious rise in prices may finally be cresting, world markets were up for a fifth straight day on Tuesday, and the dollar was on track for its longest losing streak in a year.
The STOXX 600 increased by 0.2 per cent due to another welcome drop in gas prices in Europe, while the 47-country MSCI world index gained a similar amount ahead of a later increase on Wall Street that is anticipated.
After German business confidence data revealed rising recession anxiety, the yields on the eurozone bond markets dropped.
The primary event of the day will be the release of US inflation statistics at 12:30 GMT, which will be used to inform the Federal Reserve meeting scheduled for next week.
The headline inflation rate is anticipated to decrease slightly to roughly 8 per cent year-over-year. In contrast, the core rate, which excludes the more volatile components, is anticipated to increase by the same 0.3 per cent month-over-month as in July.
According to John Hardy, head of FX strategy at Saxo Bank, “I would concentrate on the core month-over-month number for a surprise either higher or lower,” adding that Tuesday could be a crucial day for the dollar given its recent mini-crash.