The dollar continued its run higher this week with a convincing performance yesterday, fueled by higher Treasury yields. Markets are starting to doubt themselves further as to whether the Fed will pause in June, as odds of a rate hike slowly climb. Fed funds futures are showing odds of a 25 bps rate hike being at roughly 40% now as opposed to the mere 10% pricing at the start of last week.
Major currencies aren't doing a whole lot to start the day but be wary of the dollar extending gains later on. USD/JPY did move up to test the 140.00 mark though but is now seen around 139.80 on the day.
Elsewhere, equities remain cautious despite the rousing gains in tech stocks yesterday - which owed much to Nvidia's big gains. US futures are down roughly 0.2% and that will keep broader market sentiment on edge ahead of European trading.
Looking ahead, UK retail sales for April will be one to watch for the pound. But it shouldn't distract from the inflation data earlier this week, which is reaffirming calls for the BOE to act more aggressively in the months ahead. Still, that hasn't been enough to give GBP/USD a lift and that says a lot about the directional bias in the pair now.
0600 GMT - UK April retail sales data
0645 GMT - France May consumer confidence
That's all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.