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The volume of retail sales in the US was expected to advance once again. in June. The headline number rose by only 0.4%. It was predicted to rise by 0.7% after +0.5% last month (revised down from +0.5%). The core figure was predicted to rise by 0.5% after 0.6% but actually remained flat. The Empire State Manufacturing Index provided a positive surprise by rising to 9.5 points. It was estimated to remain positive, but slide from 7.8 to 5.2 points. This is an early indicator for July.

The US dollar was on the rise towards the publication, with EUR/USD already dipping below 1.30 and USD/JPY making a move back above the 100 line it battled with recently. The US dollar changed course after the publication. EUR/USD is above 1.3030. USD/JPY is falling from 100.44 to 100.20. Also GBP/USD which was already sliding towards 1.50, is now moving above 1.5080. AUD/USD is also away from the danger zone of 0.90.

Consumer spending is the vast majority of the economy in the US, making the volume of retail sales a significant market mover.

Nevertheless, in the wider scheme of things, this indicator along is not likely to change the course of the Fed. A tapering of bond buying is still projected to be announced in September, with a smaller camp assuming it will arrive in December.

Apart from important economic indicators such as this one, a major event in the US this week is the testimony of Ben Bernanke in Washington.

Further reading:  Bernanke’s comments undermine the dollar; What to expect this week