This week has been a mixed bag for the dollar.  Focus remains on FED policy and timing of the next rate hike.  We have had multiple FED presidents speaking this week, however only Powell is a voting member of the FOMC this year.

All have reiterated that they see further tightening of the monetary policy this year, with some predicting as many as three rate increases in 2016.  Market participants aren’t convinced, with pricing indicating the first hike in 2017.  The US retail sales report was the only real piece of data this week that had the opportunity to change these views.  However, it contracted for the second time in 3 month, which isn’t likely to do the 1st quarter GDP figures any favours.  There is now extremely slim chance of a rate hike in April, and little for the FOMC to justify a rate hike in June.  It’s very difficult for the FED officials to shrug off the global market conditions, and will require very strong retail sales figures over the next 3 months.  

With average performances from the UK and US, GBP/USD will be driven purely by Brexit fears and looks to continue to do what it has done for over a month: remain in the broad  1.4000 - 1.4500 range until June.