USD

The US dollar regained ground before the end of the trading day on Friday, as Yellen’s speech reassured market watchers that the US economy is on track with its recovery. 

Data from the US was also slightly better than expected, as the core CPI showed a higher than expected 0.3% gain while the headline figure came in line with expectations of a 0.1% uptick. US banks are on holiday for Memorial Day today, which means that there are no reports lined up from the economy.

EUR

 The euro continued its slide in recent sessions, as risk aversion favored the lower-yielding currencies. Data from the euro zone came in line with expectations, with the German Ifo index dipping from 108.6 to 108.5 and the country’s final GDP reading unchanged at 0.3%. Euro zone banks are also closed in observance of Whit Monday today so there are no reports due from the region.

GBP

 The pound suffered a nasty selloff last Friday, even though the public sector net borrowing report came in better than expected. A couple of MPC members, namely BOE Governor Carney and Deputy Governor Nemat Shafik, gave testimonies then and the latter talked about the risks associated with altering the yield curve through rate changes. There are no reports lined up from the UK since banks are closed for the holiday.

CHF

 The franc continued its slide to the dollar in recent trading sessions, as there were no reports to keep the Swiss currency supported last Friday. There are still no reports lined up from Switzerland today, leaving the franc sensitive to risk flows.

JPY

 The yen advanced to most of its currency rivals thanks to risk aversion but gave up ground to the US dollar. The BOJ didn’t make any changes with its monetary policy, although one member voted to taper asset purchases. Meanwhile, policymakers also decided to upgrade their outlook for household spending and housing investment, lending more support for the yen. Earlier today, Japan released a stronger than expected trade balance report.

Commodity Currencies (AUD, NZD, CAD)

 The comdolls gave up a lot of ground at the end of the trading week, as Yellen’s speech drove up demand for the dollar once more. It didn’t help that Canada’s reports came in mixed, with a stronger than expected headline retail sales gain of 0.7% and a weaker than expected core figure of 0.5%. CPI data was also mixed, as the headline figure showed a 0.1% drop and the core figure came in line with expectations of a 0.1% gain. There are no reports due from these economies today.

By Kate Curtis from Trader’s Way