The dollar index is now back at 100.50 after hitting as high as 101.76 earlier this week and after 2 weeks of solid gains shows some signs of weakness. Dollar is now trading as the third weakest major currency. The sudden strength in USD this last week, has made many investors bet on a correction.
The focus was on Fed chair Janet Yellen earlier this week, as she made her semi-annual appearance before Congress. In her testimony, Yellen was upbeat about the US economy. She noted that inflation is moving towards the Fed’s 2% target, the labor market is recovering and consumer spending is strong.
Stock markets had a mixed day yesterday. The Nikkei share average fell -0.5% after scaling near six-week highs earlier this week. U.S futures are set to open in the red (-0.2%). Indicators are showing that stocks are overbought which is making some investors reconsider whether they should sell, booking some profits.
GBP is trading through the psychological 1.25 level, being dragged higher mostly on technical, JPY has strengthened as BOJ Governor Kuroda noted that low interest rates could create a new financial crisis.
The yellow metal rose yesterday as the U.S dollar declined along U.S 10-year treasury bond yields. Gold hits the high of $1242.64 yesterday. It is currently trading around $1237.71.
Not many economic news scheduled for today and all with low to medium volatility risks associated with UK’s retail Sales report the major one.