The US dollar strengthened against a host of major currencies as investors geared up for the release of key inflation and retail sales data later in the week. The dollar index rose 0.1% to 104.12, while the euro fell from a 10-day high by 0.1% to $1.0771. The sterling remained stagnant against the greenback, trading at $1.2628.
Retail sales, due to be released on Thursday, are expected to have declined by 0.1% in January, down from a 0.6% rise in December, according to Reuters. Economists are expecting the Consumer Price Index (CPI) to rise 2.9% in January, compared to a 3.4% rise the previous month.
“Psychologically, dropping down into the 2s (in the CPI year-on-year) even though it is 2.9% for the headline CPI number would be a good boost for market sentiment,” Amo Sahota, executive director at FX consulting firm Klarity FX observed, before warning investors to await the release of the CPI results before crafting any expectations.
