The US Dollar closed the week recovering most of the losses from a week ago. Despite weak durable goods orders which fell -1.0% on the core and -2.80% on the headline and mixed existing and new home sales numbers, the Dollar managed to keep its steady pace of gains. Friday's final revision to the fourth quarter GDP saw the US economy revised higher to 1.40% annual growth, up from the previous estimate of 1.0%.
In Europe, equities were under pressure as terrorist attacks in Brussels briefly sent the markets in a flight to safety. The Yen, Swiss Franc and gold were bid up as a result, but the risk aversion quickly faded as the markets got back to normalcy. Economic data from the Eurozone this week saw the flash services PMI rising to 54.0, while manufacturing was soft at 51.4. The flash composite PMI was also broadly higher at 53.7. Economic data was broadly in the positive with Friday's French GDP numbers being revised higher as well. However, the Euro remained under pressure for most of the week.
The British Pound was the big loser this week as consumer inflation failed to keep up the recent gains in wages. British inflation increased 0.30% in February on a year over year basis, same as in January, while headline inflation was steady at 1.20%. Retail sales were a bit encouraging as core retail sales fell 0.20%, less than the anticipated -1.0% while the headline retail sales fell 0.40% against expectations of a 0.70% decline on a month over month basis. The retail sales numbers saw a modest turn around in prices which helped the British Pound to recover from a 5-day low by Friday's close.