There has been a mixed bag of data from the US this week. First we saw disappointing data from the housing market, particularly the number of building permits month on month. This was followed by the inflation data, which came in slightly better than expected; year on year inflation is now at 2%. And yesterday we saw the initial jobless claims come in better than expected, at 312,000.
But the key event of the week was the Federal Reserve meeting and the announcement that follows it. Although the Federal reserve Chair Janet Yellen was circumspect about interest rate rises she was positive about the state of the US economy and this boosted risk appetite which perversely undermined the US dollar as it is viewed as a safe haven asset and which is at odds at what is happening in Iraq. This is one of the key reasons we saw sterling and the euro strengthen against the US dollar in the second half of the week. Today we do not expect any data out of the US