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Dollar gains despite bullish UK retail sales

  • GBP Retail sales 0.7%
  • GBP CBI Realised sales 18
  • USD Unemployment claims 282k 
  • CAD BoC Gov Poloz speaks

Yesterday morning started with the Fed’s Bullard speaking early in the morning. Bullard is a non-voting slightly hawkish member and his tone continued that way.

UK retail sales followed with a figure that has recently been suffering a hangover from the huge Black Friday driven November data. In the afternoon we had the usual US jobless claims data and Fed member Lockhart spoke in the afternoon.

UK retail sales rose at the fastest pace in three months and exceeded economists’ forecasts. The bullish reading of 0.7% suggests that a consumer led economic recovery remains strong ahead of national elections in May. The falling shop prices driven by the plummeting oil price has encouraged Britons to hit the shops and therefore boost the UK’s largest sector. The news gave the Pound a boost before reversing after its release yesterday morning.

US unemployment claims and Fed Voting Member Dennis Lockhart sent GBP/USD lower yesterday afternoon. The jobless claims figure posted a better than expected reading giving the strong US labour market another boost; a factor that the Fed closely monitor. Lockhart spoke yesterday afternoon and signalled that he would increase interest rates mid-year or even later;  as the economy throws off “mixed signals” at the moment.

  • GBP BoE governor Carney speaks in Frankfurt
  • USD Final GDP
  • FOMC Member Fischer speaks
  • USD Fed chair Yellen speaks

Today’s docket is dominated by US data and Central Bank speakers. This morning the Bank of England Governor Mark Carney speaks at the Bundesbank conference in Frankfurt. The US final reading of GDP is due at 12:30 GMT and is forecast to climb slightly from 2.2% to 2.4%. Then, at 19:45 GMT Fed Chair Janet Yellen is scheduled to discuss the Federal Reserve’s monetary policy.