The cycle of positive news out of the US came to an end yesterday, when the most recent unemployment figure showed a jump in the number of new people filing for unemployment insurance from the previous week. The greenback turned bearish following the report, and took losses against virtually all of its main currency rivals. The GBP/USD went up close to 140 pips yesterday, and peaked at the 1.5883 level. Meanwhile, the EUR/USD shot up over 260 pips, reaching as high as 1.3380.
While the dollar had an unusually bearish day yesterday, there are already signs that the currency is recovering. Investors are still concerned with exactly how far reaching the euro-zone debt crisis is and have returned to the safe haven buck as a precaution. The EUR/USD has fallen some 30 pips in overnight trading, while the GBP/USD has tumbled close to 60 pips since yesterday afternoon.
Today, investors will be paying attention to a batch of significant US news, set to be released at 13:30 and 14:55 GMT. The US Retail and Core Retail Sales figures as well as the Prelim UoM Consumer Sentiment report all promise to generate high levels of market activity before we close out the week. At the moment, analysts are predicting a slight decline in the Core Retail Sale figure and an improvement in Consumer Sentiment. How this will affect the greenback is yet to be seen, but traders can count on some dramatic price shifts to occur this afternoon.