The dollar is likely to stay stuck in a tight range for now as market participants await key interest-rate announcements by central banks over the next two weeks. Investors are likely to wait for these key events “before riding more sustained trends,” UniCredit Research
However, it expects the dollar will continue to retain a “bullish bias,” with the DXY dollar index remaining firm at close to 103.50.
Sterling weakened slightly after data showed U.K. retail sales fell by 3.2% during December, much more than expected.
The data suggest the U.K. economy “certainly isn’t out of the woods,” Wealth Club said. “Whether December’s weak retail sales are a blip or the start of a more worrying trend remains to be seen.”