Fed chair Janet Yellen continued to give markets forward guidance yesterday. Yellen’s hawkish stance remained as she signaled a possible three rate hikes this year with the first being triggered at next month’s meeting. Yellen has said the central bank do not need to wait for fiscal stimulus in order to hike rates. The Greenback strengthened drastically against the majority of its counterparties and the probability of a rate hike rose to 34% after the Fed chair’s comments.
In other news, a raft of bullish US data was released yesterday afternoon helping to boost the Dollar. Firstly, US CPI (Consumer Price Index) exceeded expectations by more than double, as inflation rose to 0.6% for January, its highest reading since March 2013. Simultaneously, retail sales and the empire state manufacturing index also beat the economists’ consensus, adding to the bullish couple of days we have seen for the Greenback.
Data is slowing down as we near the end of this week, with very little hitting the wires today. The only data of note due for release will come from the US with Building Permits and the Philly Fed Manufacturing Index being posted. Although considered high tier information, there is rarely any volatility for the Greenback as a consequence. Also due for release today are the latest accounts from the ECB’s last board meeting.