Forex news for January 14, 2015:

The news story was the weak US retail sales report but the market story was how the US dollar shrugged it off.

The dollar fell around 70 pips right across the board after the data but was able to recover the bulk (and some cases more) of those losses over the remainder of the day. It’s been a familiar theme in the past few months: traders sell the US dollar on a bad headline, only to run into buyers waiting in the weeds.

USD/JPY was struggling well-before the data as it broke 117.00 in Europe but the data sent it down to 116.07 from 116.75. The bottom came quickly as bids ahead of 116.00 sopped up the supply and that started a one-way march all the way up to 117.36.

EUR/USD slipped after the ECJ ruling down to 1.1728 but had stabilized and was climbing ahead of retail sales then sprang up to 1.1846. From there it skidded back down to 1.1774 and it sits just above.

Cable, as has been the case in the past week, was better-able to hold onto its gains, in part because of hawkish comments from Carney. It reached 1.5269 on the retail sales move then stumbled but only back to 1.5229.

USD/CAD popped the 1.2000 barrier in European trading but then profit taking and USD weakness sent it back down to 1.1930. A second wave of buying came on oil weakness and it crested just over 1.20 again. But later oil made a strong move to the upside and USD/CAD fell back to 1.1950.

The Australian dollar was the laggard in Asia with copper taking a beating but it managed to make a good rebound and finishes about 70 pips off the lows at 0.8148. It’s another successful test/hold of 0.8000.

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