Forex Today: US Dollar consolidates losses, markets await comments from Fed officials.
Here is what you need to know on Monday, February 17:
Major currency pairs trade near the previous week's closing levels on Monday as trading conditions remain thin, with financial markets in the US remaining closed in observance of the Presidents' Day holiday. The economic calendar will not offer any high-tier data releases but investors will pay close attention to comments from Federal Reserve (Fed) officials later in the day.
The data published by the US Census Bureau announced on Friday that Retail Sales declined by 0.9% on a monthly basis in January, coming in worse than the market expectation for a decline of 0.1%. The US Dollar (USD) Index struggled to gain traction heading into the weekend and lost more than 1% on a weekly basis. In the European morning on Monday, the USD Index stays virtually unchanged on the day, slightly below 107.00.
During the Asian trading hours on Monday, the data from Japan showed that Industrial Production contracted by 0.2% in December, following the 0.3% growth recorded in November. Meanwhile, Japanese Chief Cabinet Secretary Yoshimasa Hayashi said that Japan faces significant challenges if its companies become targets amid US President Donald Trump's policies. He added that the government will respond carefully to potential impacts. USD/JPY stays under modest bearish pressure to start the new week and trades below 152.00.
EUR/USD benefited from the broad-based selling pressure surrounding the USD and rose more than 1.5% in the previous week. The pair moves sideways in a tight range below 1.0500 in the European morning on Monday.
GBP/USD reached its strongest level since December 19 at 1.2630 on Friday but erased a portion of its daily gains in the second half of the day. Nevertheless, the pair rose 1.5% and closed the second consecutive week in the positive territory. In the early European session, GBP/USD stays quiet at around 1.2600.
The Reserve Bank of Australia (RBA) will announce monetary policy decisions in the early Asian session on Tuesday. Investors expect the RBA to lower the policy rate by 25 basis points (bps) to 4.1% from 4.35%. AUD/USD holds its ground early Monday and trades at its highest level since mid-December above 0.6350.
Gold corrected sharply lower on Friday and lost more than 1.5% on the day. XAU/USD regains its traction on Monday and trades modestly higher on the day near $2,890.