020 7898 0500One of the biggest global rallies in the currency markets for seven years was seen yesterday following comments by Federal Reserve Chair Janet Yellen. The dollar steadied after the first day of Yellen’s Congressional testimony, which markets took as a signal the US central bank may go softer with monetary policy tightening than it has previously insisted.
The dollar has been weakening steadily since hitting a 14-year high at the start of the year and a number of major banks who had previously backed it to gain further have suggested its longer term gains are over.
However, US inflation picking up gives rise to further speculation of an interest rate hike in the near future. We also saw unemployment claims come out at 247,000, which is slightly worse than expected.
Today sees some important inflation and retail sales data out of the US, with a close eye on whether inflation will continue to rise.
