The US dollar had a mixed day overall yesterday. The currency did, however, manage to reach the highest level of 2014 against the euro, with many thinking that the US will see higher interest rates before the Eurozone does. The main release for the day was the inflation data in the form of the Consumer Price Index, which showed the overall level to be unchanged at 2.1%. Alongside this, the existing home sales was better than expected, helping to boost dollar strength. The major movement was not driven just by data levels, though, as investors focused on long-term disparities between economies and future prospects.
Today is a quieter one in terms of data releases, with just mildly important crude oil inventories to impact the dollar. As such, the dollar’s performance may be governed by a ‘bigger picture’ perspective of the currency’s strength.