The main market focus today will be on the US and the release of Retail Sales as well as Inflation Data. Yesterday, Janet Yellen’s comments reiterated the view that the FED will proceed with 3 rate hikes in 2017 as she does not see any significant threats to the US economy. The market reaction was mixed with the Dollar strengthening versus a few but not all other currencies. Currently, the USE is showing signs of a correction, but traders do not expect it to last long. 

Currencies: Overnight the USD recovered some losses. EUR/USD dropped from 1.0670 to 1.06 while the USD/JPY rebounded from a 5-week low from 113.80 to 114.70 at time of writing. GBP/USD continues to show weakness, as the pair dropped from 1.23 to 1.2180. Concerns about a hard Brexit continue to weigh on the currency, and it the sharp reversal suggests it might test the recent low of 1.2040 again soon. On the week, the dollar has lost 1.6 percent so far – its 4th straight week in the red, which would mark its biggest weekly fall since late July if the losses are sustained. Retail Sales this afternoon and PPI are expected to be released and both of results will have an impact on the Dollar.

Stocks: On Wall Street, major indexes finished Thursday lower, chilled by Trump’s failure to address economic policy plans at his first news conference since winning the Nov. 8 election. European shares opened higher by 0.5% this morning, despite Asian bourses closing mostly in the red zone.

Oil and Gold: Gold slipped on the back of a stronger Dollar, forcing the yellow metal to drop from a 7 week high. The dollar found some support after Federal Reserve Chair Janet Yellen said the U.S. economy is doing well and faces no serious obstacles in the short term, with the labor market looking strong. A stronger U.S. dollar usually weighs on gold, as it dampens the metal’s appeal as an alternative asset. Gold was trading at one point at $1206 per ounce, before dropping to as low as $1192. Oil prices recovered from recent lows at $50.70 and have moved again over $53 a barrel. Record Chinese crude imports of 8.56 million barrels per day (bpd) in December helped push prices somewhat, traders said. But they could not hide underlying fears over the overall health of the world’s second-biggest economy.