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The dollar index which trades against a basket of six major currencies rose to six-week highs as fed officials and stronger economic data support higher rate hikes. The EUR got boosted by pleasing German PPI data and hawkish commentary from ECB officials. From the US, FOMC member Bowman will be speaking along with the release of the US Baker Hughes Oil Rig Count.
USDCHF soared +0.77% as the dollar advanced on higher rate hike bets. Upbeat retail sales and CPI data from the US raised hopes of a bigger rate hike by the Fed, helping the dollar up. The US Bureau of Labour Statistics showed that the Producer Price Index {MoM} gained more than expected to 0.7% in January. The pair is currently trading above 0.9300 and may revisit the 0.9400 high.
GBPNZD gained +0.42% after the release of pleasing UK retail sales data. Month-on-Month retail sales were more than anticipated and the previous reading at 0.5% in January showed improving consumer spending after a healthy labour market report on Tuesday. Core Retail Sales [MoM] came in at 0.4% vs a survey of 0.0%. The pair may face resistance at 1.9300 and 1.9400 psychological highs before reclaiming 1.9550, support-turned-resistance.
EURCAD bounced back to near 1.4400 high after falling slightly below 1.4350 in early trade. Hawkish commentary from ECB officials on further rate hikes gave the Euro an upper hand on Friday. ECB’s Schnabel said inflation needs to get back to restrictive areas and they will do whatever it takes to achieve that. Statistics Canada will release the Raw Materials Price Index data for January which is expected to rise to -0.2% from -3.1% on a monthly basis. The pair was up +0.11% and may reclaim 1.4456 if the 1.4400 high is breached.
European stocks slumped on Friday weighed down by hawkish remarks from central banks. The FTSE100 tanked -0.26% from the 8007 intraday high with 7800 being a key figure to watch out for on the downside. The CAC40 in France fell-0.61% after a failure to breach the 7400 high. Sellers may be challenged by the 7200 low. The German40 lost -0.86% with a high at 15300. A move below 15200 may intensify some selling pressure to 14800.
US stock futures were down as the dollar rebounded on possible further tightening. The S&P 500 futures were down -0.64% with targets seen at 4000, a psychological low. Dow Jones Industrial Average index futures slid -0.50% as 33300 remains a key figure on the slide. Nasdaq100 futures dipped -0.86% as sellers approached the 12200 mark.
Additionally, the yield on the 10-year treasury note was up +0.85% as it appreciates along with the dollar, as investors anticipate higher rate hikes in the near future. The benchmark yield rose to 3.90%, a high last seen 3 months ago. The yield may take a breather to 3.83% before rallying to the 4.00% mark.
