- Fed Chair, Janet Yellen, signaled yesterday that the central bank could raise rates at its next meeting as all meetings are “live”, leaving an optimistic note on the economy in testimony to Congress.
- BoJ Governor, Kuroda, said he now has plans to raise the central bank’s bond yield targets, despite global yields rising as inflation “remains distant from our 2% target”.
- South African inflation slowed more than expected in January with CPI rising 6.6% year-on-year, down from 6.8% in December.
The US Dollar index has risen after U.S. consumer price inflation jumped 0.6% on the month, and increased 2.5% year-on-year, due in part to higher gasoline prices. That's the fastest pace in nearly four years, and supports the case for another rate hike.
The Dollar is higher across the board following Yellen's comments and the stronger than expected inflation and retail sales data. U.S. retail sales came in above expectations for January, rising 0.4%, and December's were revised up to show a 1% increase.
The Pound is lower again today, as concerns that consumer spending will slow as the pickup in inflation squeezes disposable income while wage growth is relatively weak. U.K. employment rose unexpectedly in December, as the labor market remained robust, though weaker average earnings are a concern as inflation accelerates.
The Euro is at a 1-month low against the US Dollar as the gap between Eurozone and U.S. interest rates widens, sending the single currency lower.
The Loonie is lower against its rising U.S. counterpart, despite manufacturing sales jumping for a second consecutive month in December.
The Aussie Dollar continues to encounter resistance at 0.77 cents versus the US Dollar. Having strengthened overnight after consumer sentiment rose 2.3% in February, the Aussie is marginally down on the day.
The Swedish Riksbank kept rates on hold and its QE program unchanged as expected, but indicated that it could still loosen policy further if necessary. The Swedish Krona is lower by around 0.5% after its central bank said it has extended its mandate to intervene in the currency market, and that it could still cut interest rates, despite inflation nearing its 2% target.