With a quiet start to the week for the US dollar, most of this week’s movements started off being dictated by sterling movement. Investors looked forward to US Federal Chair Yellen’s 2-day testimony where they expected cautious comments regarding possible interest rate rises this year. Her bleak assessment of the US economy increased fears of impending recession, depressing global stock markets and significantly reduced the likelihood of four interest rate increases this year. In fact some commentators are wondering if there will be any increases in interest rates this year.
We have both retail sales and consumer sentiment releases to finish off the week, with both figures expecting to post growth. As usual, any surprises could see movement for the US dollar.