Daily Currency Update

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The Greenback rises following buoyant Chinese economic data and weak U.K. data.

USD - United States Dollar

The U.S. dollar index increased as the Sterling fell to fresh lows following lower than expected economic data in the U.K. The EUR/USD and GBP/USD pairs are falling 0.25 and 0.22 percent at the time of this writing. Also, increased risk appetite helped the U.S. dollar following buoyant Chinese economic data (see the key movers below).

Regarding local economic releases, U.S. December housing rose to 1,608, while the forecast showed 1,358. However, U.S. December building permits fell to 1,416 versus the estimate of 1,460. This mixed data is supporting the U.S. dollar for now. Furthermore, progress on the U.S. trade deal with Canada and Mexico has helped the Greenback. Later today, Fed Vice Chair Randal Quarles will make a public speech at 12.45 pm EST, which can influence the price of the U.S. dollar.

Another critical piece of upcoming economic data will be the reading of the University of Michigan Consumer Sentiment index. The expected number is 99.20, and the previous data point is 99.30; any surprise might influence the price of the U.S. dollar.

Key Movers

In the U.K., the main driver of the Pound was the release in retails sales numbers. Retail sales surprisingly decreased in December. The volume of goods sold in stores and online fell 0.6 percent, versus expectations of a +0.6 percent increase. Money markets now price a 75 percent chance of a rate cut on January 30th, compared with 62 percent on Thursday, according to Bloomberg.

The GBP/USD pair had hit a high of 1.3120 before the release of retails sales at 4:30 am EST, but it erased all its gains following the lower than expected retail sales numbers, touching an intraday low of 1.3026. It is trading at 1.3056 at this moment.

The Chinese Yuan also advanced after China reported better than expected industrial output and retail sales. However, the Yuan reversed gains, and it is falling 0.2 percent versus the U.S. dollar around 9 am EST.

Expected Ranges

EUR/USD: 1.1095 - 1.1143 ▼

GBP/USD: 1.3026 - 1.3119 ▼

USD/CAD: 1.3033 - 1.3059 ▲

AUD/USD: 0.6883 - 0.6911 ▼

NZD/USD: 0.6614 - 0.6651 ▼