The British Pound rose on Friday after data revealed that UK retail sales grew at their quickest pace in nearly three years in January. In fact, the data did not change estimates for the Bank of England’s monetary policy outlook. Persistent price pressures, stable labour demand, and healthy consumer spending would allow BoE policymakers to maintain a hawkish tone for an extended period of time.
The Euro rallied on Friday, retracing some of its recent losses as investors waited for further data to provide new impetus. Today’s economic calendar does not include any macroeconomic data releases that could impact the Euro. Investors will pay close attention to early Manufacturing and Services PMI readings from Germany and the Eurozone, which are due later this week.
The US dollar remained near three-month highs as additional evidence of sticky US inflation led investors to abandon expectations of early interest rate cuts. In fact, Jerome Powell stated that the central bank needed more confidence in inflation’s downward trend before cutting rates. Looking forward, U.S. markets will be closed for the Presidents’ Day holiday, and volumes are expected to be low throughout the day.
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