Forex Today: USD struggles near 1-week low, Kiwi battered on retail sales miss, UK retail sales eyed

Having failed to receive any support from yet another round of solid US macro indicators released on Thursday, the US Dollar remained on sidelines near one-week low during Asian session on Friday. Even recent hawkish comments from various Fed officials, including the Fed Chair Janet Yellen has failed to extend any support to the greenback as investors remain worries about the uncertainties over the US President Donald Trump's proposed fiscal policies.

Meanwhile, the Kiwi came under some selling pressure in wake of lower-than-expected quarterly retails sales growth. Headline New Zealand retail sales rose 0.8% for the fourth-quarter of 2016, matching previous quarter's 0.8% increase (revised lower from previously reported 0.9%) but missed consensus expectations pointing to a 1.1% increase. Meanwhile, excluding automobiles, the sales recorded a 0.6% q-o-q growth, up from previous quarter's gain of 0.3% (also revised lower from 1.1% reported earlier).

With an empty US economic docket, market focus on Friday would remain on the release of monthly retail sales data from the UK. Consensus estimates point to m-o-m growth of 0.9% and annual growth is expected at 3.4%, down from previous month's 4.3%. Against the backdrop of BRC figures released earlier this month, showing a 0.6% y-o-y decline in the like-for-like sales in January, a weaker-than-expected number remains a distinct possibility.

Main topics in Asia

NZD/USD: retails sale miss sends the bird down test the 0.7200 level

NZD/USD has dropped below the mid-point of the sideways channel and is making further tracks to the downside on the back of the bid misses in retail sales Q4.

Strange times in the US dollar and yields – ANZ

Analysts at ANZ explained that foreign creditors seemingly have less appetite for US assets, with TIC data showing net selling of $42.8bn in long-term securities in December.

USD/JPY - We remain a buyer on dips – Westpac

“We remain a buyer of dips, but would now shift the buy level up to 111/113”, says ForeX focus note from Westpac Institutional Bank.

Key focus for the day ahead

GBP/USD eyes UK retail sales, will it end the week on a positive note?

UK data due today is expected to show  retail sales volumes only edged up 0.9% month-on-month in January, causing the year-on-year increase to moderate to 3.4%% from 4.3% in December and 5.7% in November.

Interest rates unsupportive for GBP/USD – Westpac Institutional Bank

‘ForeX  focus’ from Westpac Institutional Bank says the yield (interest rate) differential is in favor of the US dollar. The bank sees range bound action during the weeks ahead, but eventually sees a break lower on Brexit details.  

EUR/USD remains offered below 1.0699 – Commerzbank

In view of Karen Jones, Head of FICC Technical Analysis at Commerzbank, the pair’s stance remains offered below 1.0699 for the time being.

USD/CHF: vicious sell-off should stabilise near 0.9945/25 - Commerzbank

Following the USD/CHF pair's recent sharp reversal from nearly one-month tops, Karen Jones, technical analyst at Commerzbank, provides a near-term technical outlook and foresee the selling pressure to abate near 0.9945-25 region.