Support for further interest rate hikes increases

The US is now firmly focused on the Presidential inauguration on 20th January.

On Monday the dollar fell by almost 0.5% against the euro. Federal Reserve member Eric Rosengren said, however, that three rate hikes seem reasonable with the central bank on target to hit inflation and unemployment figures this year.

The only data release of note this week is US retail sales data. With last week’s vehicle sales hitting an 11-year high, retail sales are expected to be strong for the closing month of 2016, so if this comes in higher than expected, we could see the dollar strengthening further.