The US dollar rallied briefly against its main forex counterparts as CPI and retail sales data released today beat expectations. Data released by the US Bureau of Labor Statistics indicated that the consumer price index for January was higher than expected by 0.1%.
The US dollar briefly gained ground against its main competitors such as the euro and the Japanese yen before retracing most of its gains later. The US dollar index, which tracks the greenback’s performance, hit a daily high of 101.76 before losing ground and trading at 101.11 at the time of writing.
The US dollar rallied after the consumer price index was reported at 2.5% year-on-year for January versus the expected annualized figure of 2.4%. The advance retail sales report for the last quarter of 2016, released by the Census Bureau also beat expectations as retail consumption was reported to make up 69% of the US GDP.
The Fed chairperson Janet Yellen’s testimony before the House Financial Services Committee did little to save the greenback from retracing its gains. Yellen said that the labor market was almost at full employment, but this seemed to have little impact on the greenback’s performance.
The US dollar’s future performance is still at the mercy of Donald Trump‘s policies and declarations that are inextricably linked to the currency. However, a rate hike in March will also affect the greenback’s performance.
The USD/JPY was trading at 114.15 as at 16:54 GMT having rallied to a high of 114.93 after the release of the data. The EUR/USD wastrading at 1.0595 having hit a low of 1.0519 after the release.
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