Dollar Continues to Appreciate as Upbeat Data Hits the Market

The dollar continued on it’s journey north throughout yesterday’s trading as fears over the US/North Korea situation decreased and safe haven trades were reduced. This move was assisted by stronger than expected Retail Sales figures out in the US session and as we enter the Asian session the dollar index is up over 100 points on the week. These figures gave further credence to the Fed’s Dudley’s more hawkish comments from the day before and helped increase the odds of a further rate hike this year.

One of the currencies to suffer the most overnight from the dollars strength was the sterling, where worse then expected CPI data led to a quick big figure drop in the cable.

Looking ahead to today’s trading and we anticipate seeing more traders looking to jump back on the dollar bandwagon. It’s quiet on the fundamental data front through the Asian session but once again we have good event risk in the London session for the sterling as the employment numbers are due. Then in the the New York session we have the US Building Permits numbers out along with the weekly Crude Oil Inventories, but these could both be superseded by the Fed Meeting Minutes later in the session.

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