The US dollar has started February in the same vein that it finished January, buoyed by evidence of US economic recovery, after Friday’s GDP numbers, and fears that China will implement measures to control its economic growth.

The dollar has grown stronger to start this week, gaining ground against most major currencies and commodities, the Japanese yen, being the prominent exception.

While declining oil prices over the last week have not necessarily caught the attention of consumers as much as they have speculators and impacted businesses, falling gas prices have. Friday (January 22) marked the seventh consecutive day of falling fuel prices with the current national average at $2.73, according to Wright Express and the Oil Price Information Service.

The spot rate gold price has dipped back to $1,122.10 per ounce thanks to the continuing resurgence of the dollar. The dollar has improved slowly but steadily in recent weeks as it becomes more likely the Fed will raise interest rates sometime in the next several months.

Sterling continues to be buoyed, especially against the Euro making new 4 month highs, after CPI data came in well above expectations at 2.9%. It now seems pretty much certain that the governor of the Bank of England, Mervyn King, will have to write to the Chancellor next month, especially with the re-imposition of the VAT rate, to explain why CPI rose more by than 1 % above its target level in January. It also means that there is little chance of further quantitative easing.

As the dollar has rebounded from some recently disappointing jobs news, it has pushed back against recent gains in oil prices and gold prices. A barrel of oil fell below $79 in Friday (January 15) morning trade on the New York Mercantile Exchange.