We’ve been starved for fundamentals, but big data returns for the US. Retail sales rose 0.6% in December, less than analysts expected, but a silver lining was found in November’s sales which were revised higher. Auto sales led the rally with the biggest increase among 11 other categories, stemming from increased consumer confidence since the election. Americans are buying more gas to go with their new cars and online spending also rose as non-store retailers took a larger share of holiday spending.

Overnight we heard from the queen of the USD herself, Janet Yellen. The Fed chair took an unusually upbeat tone towards the near-term outlook in a town hall-style meeting with educators: “I would say I don’t think there are serious obstacles. I see the economy as doing quite well.” Yellen did mention some broader concerns for the long-term outlook, citing a widening gap in income inequality and stinted growth in labor productivity.

The dollar has erased the significant losses overnight, recovering to daily highs against the pound, euro, Japanese yen, and the Aussie dollar. Global risks are still a concern for markets from what we’ve seen in gold. Gold prices are at the highest levels since November, and likely to remain supported as investors weigh the risks of political uncertainty across the globe. If we see renewed concerns around ambiguous US policy and indefinite timescales for Britain leaving the EU, we would look for risk-off trades (such as a stronger JPY) to once again take the helm.

EURUSD:   Erasing overnight gains, the euro fell as retail sales supported the dollar.

GBPUSD:  The pound also lost momentum against the greenback, falling back to push the lower-bound of the 1.21 range.

AUDUSD: The story of a stronger USD took the pair back to session lows, though the Aussie dollar has firmed and bounced slightly from the daily lows.

USDCAD: CAD remains mixed, one of the more resilient major currencies today that has been able to stave off the wider USD gains.