The dollar was at the back foot in Asia and Europe, but holding near fresh 13 ½ year high against the basket of major currencies, posted on Wednesday. The dollar index briefly probed below 100.00 level, on extended correction from fresh high at 100.59, after upbeat UK retail sales data.

The US dollar maintained positive tone on remarks from Fed chief Janet Yellen’s testimony. Talking about interest rates, Yellen said that economy needs to warrant gradual rate increases, while keeping rates on hold could spur excess risk-taking and delaying rate hikes for too long could mean having to tighten faster.

Yellen also said that US economy is making very good progress and that the Fed could adjust outlook based on new economic policies. Yellen expects uncertainty to last for considerable time, with near-term risks being reasonably balanced.
Yellen’s comments so far kept the dollar supported, as dollar index came ticks ahead of Wednesday’s high.

The greenback recovered ground after dipping in Europe and was additionally boosted by upbeat US housing sector data, as well as strong fall in weekly jobless claims that offset negative impact from mixed inflation numbers in October.

The dollar remains strongly supported by expectations on Fed’s rate hike by the end of the year and significant changes expected during coming Donald Trump presidency.

The Euro was lower at the beginning of US session and returned below 1.0700 handle, as fresh weakness fully reversed recovery attempt during European trading that was capped at 1.0744. The single currency remains strongly bearish against the dollar and is in steep descend after US elections.

British pound returned to more familiar levels after reversing gains on rally, triggered by better-than-expected UK retail sales that pushed sterling to 1.2500 level against the dollar. Retail sales unexpectedly rose to 1.9% in October, beating the forecast at 0.5% and coming well above September’s upward-revised release at 0.1%

The dollar stayed on firm path against Japanese yen, but still holding below fresh high at 100.74. The pair was up 0.29% at the time of writing, against Wednesday’s close in red.
Gold was barely changed on Thursday, holding within the range that extends into fourth straight day, trading between $1210/32 span., Market Analysis