The pound had a choppy session against the dollar on Thursday, dipping to a six-day low before recovering as swings in the bond market drove the moves. With little UK data to go on, Sterling was largely at the mercy of wider market sentiment. UK government borrowing costs jumped to multi-year highs early on adding to the pressure on the Treasury ahead of the Autumn Budget before easing back later, which helped the pound claw back its losses.
The dollar was equally directionless. It firmed at first as nervous markets sought safety, with rising oil prices and expectations of higher interest rates around the world weighing on risk appetite. As the mood steadied through the day, though, the dollar gave back those gains.
The focus now turns to Friday’s University of Michigan consumer sentiment survey, expected to show US household confidence slipping to 47.6 a third straight fall and the weakest since May. A soft reading could put the dollar on the back foot, though if markets stay jittery, its safe-haven appeal may keep it supported.