The US dollar performed well in its own right yesterday, strengthening against all of its most traded partners, but weakened against a very strong sterling.
This strength came thanks to comments from the US Federal Reserve Chair Janet Yellen’s at her testimony to the Senate Banking Committee. In it, she stated that that there was significant slack in the labour market and most importantly, she stated that if the labour market continues to improve quicker than anticipated then interest rates may rise sooner than currently envisioned. Furthermore, she indicated that when the interest rates do start to rise, they could rise quickly.
The US dollar remained strong against most currencies in spite of retails sales figures disappointing yesterday, showing growth of only 0.2% for the month. On a more positive note, manufacturing data came out better than expected.
Today there are more events to influence the US dollar, starting with inflation data in the form of the Producers’ Price Index and later on today we will have US industrial production figures. Following this, Janet Yellen takes centre stage again with another testimony, this time to the House Financial Services Committee.