- Mixed US data yesterday kept the US dollar range bound with the dollar index gaining a touch after losing ground earlier in the week after the lower-than-expected CPI release. Headline Retail Sales came in slightly stronger than expected at -0.1%, and PPI came in softer than predicted with most of the weakness attributed to lower gas prices. The single currency continues to consolidate above 1.08 after its post CPI rally, with 1.0805 remaining a pivotal level in EURUSD. In the absence of any euro area data releases today, markets will look to speeches from several ECB speakers throughout the day for clues on the direction of EURUSD.
- Sterling struggled to hold on to its recent gains and slipped further after yesterday’s UK inflation report with cable falling through 1.24, where it continues to consolidate. The high recorded on Tuesday of 1.2506 acts as initial resistance with support coming in at 1.2364 ahead of the 55-day MA at 1.2284. With nothing on the docket today, markets will be waiting for tomorrow’s Retail Sales report for clues on the strength of the UK economy.
- This afternoon the attention shifts back to the US as we await the release of weekly jobless claims, Import Price Index, Industrial Production, and the Philly Fed Business Outlook. Risk appetite continues to be influenced by geopolitical news and headlines coming from the ongoing meetings between US President Biden and Chinese President Xi Jinping appear positive.
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