After a weak first quarter, investors expect US growth during April-June quarter to have improved significantly. The dollar upside seems capped in the short-term following President Donald Trump's unexpected sacking of FBI Chief James Comey earlier in the week.
The latest political turmoil in Washington has the potential to hamper Trump administration's ability to implement the much-awaited tax reform and fiscal stimulus measures. However, despite the multiple risks, the greenback has still managed to rise 0.80%, largely on account of money flowing out of safe haven assets following Emmanuel Macron’s victory in France's presidential race.
Data on tap Friday include US retail sales figures alongside the consumer price inflation data for the month of April. Should headline and core inflation figures remain above the Fed’s 2.00% target, it could cement expectations of a June rate hike.
After finding support near 113.700, USDJPY has rebounded modestly heading into the European open.