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US retail sales are mixed, but enough for USD momentum

Mixed  retail sales data from the US for September. There is a bit for everyone. Retail sales were up 0.6% as expected and with an upward revision from -0.3% to -0.2%. Core sales beat expectations with +0.5% instead of 0.4%  predicted, but this came with a downwards revision of 0.1%. And the control group rose by only 0.1% against estimations of +0.4%, which is already a disappointment.  

Nevertheless, this is good enough for the greenback to maintain the momentum.

Producer prices came out stronger than expected: +0.3% on the  headline and +0.2% on the core, both +0.1% above expectations.  While inflation is not going anywhere fast, it is not a source of worry.

Currency reaction to retail sales

  • EUR/USD wobbles around the 1.10 line. Some see potential for a fall to 1.08.
  • GBP/USD is hanging onto 1.22, still not recovering from the flash crash.
  • USD/JPY is trading above 104.20.
  • USD/CAD is around 1.3160, with the loonie somewhat cheered by higher oil prices, finally.
  • AUD/USD is around 0.7640, still holding on to higher levels.
  • NZD/USD is at 0.71.

The dollar took a pause in its strengthening yesterday, but this looks like a correction rather than a change of course.

The US was expected to report a rise of 0.6% in retail sales in September, after a disappointing drop of 0.3% in August (before revisions, which are usually of significance). Core sales were projected to rise by 0.4% and the control group by 0.4% as well.

The US dollar remained in control ahead of the publication, with EUR/USD flirting with 1.10.

More:  EUR: En-Route To 1.08; ECB Faces A Communication Challenge – Barclays

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.