USD

The US dollar got a boost from Fed Chairperson Yellen’s testimony, as she confirmed that a rate hike is possible in their upcoming meetings.

Traders took this to mean in their March statement since this comes with a press conference. Yellen downplayed the recent slowdown in average hourly earnings by saying that the labor market is tight enough to keep upside pressure on wages. Other Fed officials acknowledged that hiking rates sooner rather than later would be prudent while PPI reports printed strong results. Another testimony from Yellen is due today, along with US retail sales figures.

EUR

The euro was weaker across the board on revived Greek debt concerns, as the country is having trouble getting the green light from the IMF when it comes to getting the next tranche of bailout funds. Preliminary GDP readings from the euro zone also turned out weaker than expected, along with the German ZEW economic sentiment index which fell from 16.6 to 10.4. Only the euro zone trade balance is up for release today. 

GBP

The pound managed to hold its ground even though CPI readings came in slightly below expectations. The headline figure rose from 1.6% to 1.8% versus the estimated 1.9% reading while the core figure was unchanged at 1.6%. Jobs data is due today and the claimant count change could show a 1.1K rise in joblessness while the average earnings index could hold steady at 2.8%. 

CHF

The franc remained under selling pressure as the situation in the euro zone seems to be worsening, keeping the SNB on the lookout for ECB easing that might warrant currency intervention. Swiss PPI and CPI came in better than expected, with the former showing a 0.4% increase in producer prices and the latter showing a flat reading. There are no reports due from the Swiss economy today. 

JPY

The yen was mostly weaker as bond yields favored the dollar on stronger Fed rate hike expectations. Japan’s industrial production figure was upgraded from 0.5% to 0.7%. There are no reports due from Japan today so movements in bond yields and changes in market sentiment could push yen pairs around. 

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to hold on to their recent gains and go for more, boosted by stronger than expected CPI readings from China and the general pickup in risk appetite. Australia’s Westpac consumer sentiment index posted a 2.3% improvement while new motor vehicle sales grew 0.6%. There are no major reports due from the comdolls so they might keep relying on market sentiment. 

By Kate Curtis from Trader’s Way