A big disappointment from the US consumer: retail sales dropped 0.9% in December and also retail sales ex autos fell 0.9%. Another core measure slid 0.3%. Import prices dropped by 2.5%. Adding downwards revisions, this is undoubtedly a terrible report.
The dollar certainly reacts and slides: EUR/USD climbs above 1.18, GBP/USD rises towards 1.5250, USD/JPY slides to 116.30, USD/CAD ticks down below 1.1960, AUD/USD is up to 0.8165 and NZD/USD is up to 0.7770.
Gasoline prices can only be blamed for the headline number. Early Black Friday deals in November get some of the blame as well. However, also November’s numbers were revised to the downside: +0.4% instead of 0.7% originally reported. Also the ex-autos number for November was revised down.
US retail sales were expected to rise by 0.2% in December after 0.7% in November (before revisions). Core sales carried expectations for a more modest rise of 0.1% after 0.5%. Import prices were expected to plunge by 2.7%.
Yesterday, we had positive data from the US: JOLTS Job Openings rose to 4.97 million in November. This is a Fed favorite. Also other figures were looking good.
The US dollar has shown a lot of strength against commodity currencies as well as the euro. It did not fare too well against the pound and lost heavily to the yen in recent sessions.
More: 3 reasons to sell EUR/USD targeting 1.10 – Deutsche Bank
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