The US economy may be enjoying a spring comeback: the volume of sales is up 1.1% in March. Core sales are up 0.5%. US retail sales were expected to rise in March by 0.8% after edging up 0.7% in February (revised up from +0.3%). Core retail sales were predicted to post a more modest rise of 0.5%. The upbeat data reflects a bounce in consumption and adds to the argument that the economic drop was a winter effect.
The US dollar was on the rise in the wake of the new week. EUR/USD traded around 1.3820, GBP/USD struggled with 1.67 and USD/JPY moved up to 101.80. The US dollar is moving forward after the better than expected data.
EUR/USD fell to support at the round number of 1.38. GBP/USD dipped under 1.67 and USD/JPY got closer to resistance at 102.
In the commodity currency camp, USD/CAD is around 1.0980, AUD/USD holds on to the 0.94 line and NZD/USD is around 0.8660.
The deterioration in Ukraine is one of the reasons for a stronger dollar. Another is the correction from the big fall seen last week after the dovish FOMC meeting minutes.
Data for the month of March are important as they are already “clean” figures: without the effects of the harsh winter.
Against the euro, the dollar also enjoys the very anti-euro-strength by Mario Draghi, that make an explicit connection between the strength of the euro and monetary policy. So far, the hints were subtle.
Further reading: EUR/USD: Trading The German ZEW Economic Sentiment