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Most of the focus on Friday was on the lead up to Donald Trump’s inauguration, and soon after, the Greenback lost a bit of strength as risk appetite soured across the board. With the Federal Reserve announcing that the US is close to full employment, they may be looking ahead to unwind the Fed balance sheet and increase interest rates, although Fed Chair Janet Yellen insists that this has to be a very ‘gradual’ procedure which puts the Fed back into dovish mode. The overnight slump in the US Dollar mainly happened due to the lack of fiscal policy clarity as promised by Donald Trump. Most of the trading today will be subdued in the absence of any economic data from the US. For the euro, ECB President Mario Draghi is speaking later today and as per his dovish stance in his speech last week that the Eurozone is meandering on towards growth, he did manage to reiterate that inflation expectations have been edging higher in the Eurozone due to rising bond yields and the uptick in oil prices. With a barren economic calendar on the cards, most of the movement for the EURUSD pair will come from statements made by Mario Draghi in his speech today.
Sterling overlooks Friday’s weak retail sales
Sterling has overlooked Friday’s weak retail sales numbers and moved up against all its major counterparts mainly owing to weakness in the Greenback. Meanwhile, Prime Minister Theresa May will offer to deal with UK business ‘sector-wise’ including a push towards an industrial strategy to retain manufacturing in the UK to promote future growth as they make their way out of the EU and the Single Market. With no economic data out today from the UK, focus will continue to be on updates emanating from Brexit developments.
