Risk assets continue to edge higher with equity indices rebounding from recent sell offs and oil prices bouncing. The dollar rebound though just seems to have run out of steam as yesterday’s better UK retail sails saw GBPUSD recover most of its losses from earlier in the week and some half decent data from the Eurozone has kept EURUSD under pinned, with the latest German GDP data this morning also lending a hand as EURUSD trades at 1.1155. Even USDJPY has retraced having broken back above the 121.00 level on Wednesday, trading at 120.70 at the time of writing. Investors seem to be pausing for breath ahead of an extended week end with many on holiday next Monday.
For today eyes will be on more German data in the form of the IFO figures and Draghi is set to make a speech at the ECB forum at same time. This could cause some movement in the euro especially after the bungled talk from the ECB’s Coeuré as he announced plan to front load QE purchases over the summer. Listen out for further assurance of the QE program running until September 2016 but more importantly any clues as to inflation expectations. Then there’s US and Canadian inflation data with the US figure a key one to watch as anything higher than the expected -0.1% could lift the dollar.