The US dollar has enjoyed a good week, buoyed more by positive long-term sentiment than physical data. The currency enjoyed gains against the majority of its trading partners, apart from an exceptionally strong sterling. The main event of interest to investors stemmed from words from US Federal Reserve Chair Janet Yellen. In her testimony to the Senate Banking Committee, she stated that interest rates could rise sooner than expected should the labour market continue to show improvements. On top of this, she alluded to the fact that when they do start to rise, it could happen quickly.
With regards to data, the market seemed to ignore the release of worse-than-expected retail sales figures and instead focused on better than expected manufacturing data. Wednesday also showed inflation data from the Producers’ Price Index at a much higher level than anticipated, showing further evidence of a stronger economy, a point backed up as the Beige Book which indicated all 12 Federal Reserve banks local economic are expanding.
Today closes out the week with a single release of interest, as the University of Michigan provides its consumer sentiment figure.