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
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