Grilled Yellen eaten for supper
USD – The Greenback advanced against a group of key currency counterparts on the back of strong US data released overnight. US CPI for the month of January was up 0.6%, with the core data up 0.3% the biggest headline gain since February 2013. U.S. retail sales rose 0.4% for the month of January which was also a very strong report.
Also stateside Republican lawmakers criticized Federal Reserve Chair Janet Yellen’s stewardship of the U.S. economy and urged her to halt work on financial regulation until President Trump names his new policymakers to the US central bank. All eyes will now be on the March Federal Open Market Committee (FOMC) meeting where a rate hike is almost definitely on the cards. Looking ahead today, attentions now turn to US Building Permits, Housing Starts and Unemployment Claims all for the month of January.
GBP – The Pound managed to retain a positive outlook despite a set of disappointing results from UK’s inflation figures and an unconvincing jobs report. A softer than anticipated expansion of wages and a flat unemployment print set Sterling on a downward trajectory breaking through 1.2450 before the sell off was compounded by a set of upbeat U.S data. This kept the pound towards its lows however, the Pound then found some support in late afternoon as some market participants sold the US dollar when the Federal Reserve Chair Janet Yellen was grilled by U.S. lawmakers on interest rates, regulatory policy.
EUR – Not a lot in the form of Eurozone economic releases, with only Spanish consumer prices and EU balance figures. The Spanish data was very underwhelming, whilst EU trade balance gave an improvement. However, the euro (EUR) actually finished higher against the US dollar (USD) and the pound (GBP). Today sees the European Central Bank (ECB) publish the minutes of its last monetary policy meeting show us the ECB’s position on their quantitative easing programme.
Data to watch: ECB Monetary Policy Meeting Accounts, US Housing Starts, US Building Permits, US Initial Jobless Claims.