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US retail sales rise sharply, Cores CPI beats with 2.3%

US consumers went shopping in January: retail sales rose by 0.4% against 0.1% predicted. The figure for January was upgraded to 1%. Core sales have increased by 0.8 % instead of 0.4%  with an upwards revision of 0.4%. The control group is up 0.4% instead of 0.3% predicted. The data excluding gas and autos is up 0.7% against 0% forecast.  The  various core numbers are all accompanied by upwards revisions.

Also, inflation is on the rise: prices increased by 0.6% m/m against 0.3% projected. Year over year, headline inflation is at 2.5%, a level that would cause worries in Germany. However, the Fed focuses on core prices. Core inflation is up  by 0.3%, above 0.2% that was estimated. Year over year, core CPI is up from 2.2% to 2.3%, and above 2.1% expected.

The  caveat is that  real wages are down by 0.4% against 0% predicted. Year over year, wages are flat and did not advance by 0.8% predicted. While inflation is still tame, it is taking its toll on real  salaries.

The Empire State Manufacturing Index  jumped to 18.7 points, up from 6.5 and above 7.2 expected. It seems that America’s manufacturing sector is  factoring in Trump’s factory promises.

  • The US dollar is higher across the board, with EUR/USD hitting support at 1.0520 – a strong support level that has not been broken yet.
  • USD/JPY is getting  closer to the 115 level. The pair jumped on Yellen’s testimony.
  • GBP/USD drops below 1.24. It was hit  earlier by slowing wage growth in the UK.
  • USD/CAD is topping 1.31 Oil prices are not helping.
  • AUD/USD is backing off from its attempt to break above 0.77.
  • NZD/USD is  around 0.7160.

More:  Bullish on the US dollar – two opinions

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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.