Kantox currency report: dollar pulls back despite bright U.S. data
The dollar retreated from one-month highs on Wednesday in spite of strong U.S. consumer inflation and retail sales figures, which have paved the way to the Federal Reserve for a March rate hike.
Investors might have close long dollar positions after an 11-day rally as Yellen’s second day of monetary policy testimony did not offer any additional info about the pace of the bank’s monetary tightening cycle.
EUR/USD: attempting to regain 1.0600. The euro found support on Wednesday at 5-weeks low at 1.0520 and bounced up to reach intra-day highs at 1.0620, although the pair is struggling to remain above 1.0600 at the time of writing. At London market opening times, the EUR/USD is trading at 1.0605.
GBP/USD: spikes down after downbeat wage growth data. The pound dove to 1.2380 lows on Wednesday, after the UK employment report showed a deceleration of wage growth, which increases concerns about the possibility of a sharp decline in consumer spending. At London market opening times, the GBP/USD is trading at 1.2485.
USD/JPY recovery capped at 115.00. U.S. dollar recovery from last week lows at 111.60 peaked on Wednesday right below 115.00, and the pair pulled back to levels right below 114.00. At London market opening times, the USD/JPY is trading at 113.95.
In the Calendar Today
At 13:30 GMT we will have a string of second-tier U.S. data: the U.S. Housing starts and building permits will show the picture of the U.S. construction sector and the weekly unemployment claims will reflect the momentum of the labour market.
13:30 GMT U.S: Housing Starts (MoM) (Jan)
Prev: 1.226M Cons: 1.222M
13:30 GMT U.S: Building Permits (MoM) (Jan)
Prev: 1.21M Cons: 1.23M
13:30 GMT U.S: Initial Jobless Claims (Feb 10)