The dollar index on Friday is sticking to 99.07. The USD has been strengthening throughout the market, especially against the JPY, after the Bank of Japan decided to introduce negative interest rates. Following this, market attention switched to European statistics.
German retail sales in December fell 0.2% MoM and 1.5% YoY after a previous growth of 0.4% MoM and 2.4% YoY in November (reassessed up from 0.2% and 2.3% with a forecasted 0.2%).
Inflation in the Eurozone is up in January. The CPI increased from 0.2% to 0.4% YoY. The Core CPI was up by a whole percentage point in comparison with December’s 0.9% (forecasted: 0.9%). It will be interesting to see how the ECB rates inflation growth in March.
The Asian indices closed up. The Shanghai Composite rose by 3.09%, with the Nikkei 225 up 1.64% and the Hang Seng up 1.66%. The European indices also rose but they didn’t manage to pass 1%.
At 15:30 EET we will hear about US GDP for Q4 of 2015. This is the first of three assessments which will have a big effect on dollar pairs. The first assessment is always reassessed, so the reaction to the news will be short, lasting 30-60 minutes. The pound/dollar is expected to rise to 1.4350, the euro/dollar is expected to rise to 1.0940 and the Australian against the US dollar is expected to rise to 0.7115
Vladislav Antonov, Alpari analyst