Chair Yellen takes to the spotlight this week with her Congressional testimony taking place next Tuesday/Wednesday.
Her comments on the outlook are unlikely to differ much from those of the previous speakers (Fischer to note), keeping USD supported. The Chair is likely to note the recent market turbulence while emphasising that the economy remains on course and policy lies on a data-dependent path.
The big question is whether her statements will be constructive enough to keep Q2 in play, as any cautious commentary on the pace of rate normalisation could be to the detriment of dwindling Fed rate expectations.
On the data front, retail sales on Friday will be key. A moderate bounce following a weak December will provide necessary fuel for risk sentiment, given that consumer spending is the critical growth engine in the US.
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