In a week filled with significant economic data releases and central bank speakers, the financial markets have witnessed notable movements, influenced by a mixture of domestic data and global events. Let’s dive into the key events that shaped the markets this past week and what to expect in the days ahead.

The U.S. Dollar Index (DXY), a measure of the dollar’s value against a basket of foreign currencies, faced increased selling pressure after January’s retail sales figures fell short of expectations. This unexpected contraction has fuelled speculation that the Federal Reserve might consider a rate cut as soon as May. With the spotlight now turning to the U.S. housing sector and inflation metrics, including Producer Prices, Housing Starts, and Building Permits, the financial community is eagerly awaiting further clues about the health of the economy. Additionally, remarks from Federal Reserve officials Barr and Daly are highly anticipated for any hints on the future direction of monetary policy.

Amidst a backdrop of a more risk-tolerant market environment, the EUR/USD pair found strength, rebounding from yearly lows to challenge the crucial 1.0800 level once again. With no significant data expected on February 16, the European Central Bank’s Schnabel’s speech is likely to capture the attention of investors, offering insights into the ECB’s economic outlook and policy direction.

The GBP/USD pair has resumed its upward trajectory, breaking past the significant 200-day SMA (1.2562) to approach the 1.2600 area. This move comes ahead of the release of Retail Sales data from across the Channel and remarks from the Bank of England’s Pill, both of which could influence the pound’s short-term direction.

USD/JPY has continued to pull back, dropping to the mid-149.00s. This move comes as investors digest a range of Japanese economic indicators, including the weekly Foreign Bond Investment figures and the Tertiary Industry Index, set for release on February 16.

Following a significant sell-off, the AUD/USD pair has made strides above the 0.6500 mark, as traders move past the less-than-stellar domestic job report. This recovery highlights the currency’s resilience and the market’s quick shift in sentiment.

WTI crude oil prices have found renewed vigor, supported by a weakening dollar, ongoing geopolitical tensions, and expectations of a Fed rate cut. Similarly, gold and silver have benefited from the drop in U.S. yields and the general downtrend of the dollar, alongside a positive tone across the commodity sector.

As we look ahead, the financial markets remain attuned to a broad array of indicators and events. With central bank policies, economic data, and global developments at the forefront, investors and traders alike navigate through these turbulent waters with a keen eye on potential opportunities and challenges on the horizon.