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The volume of US retail sales during September rose by 1.1%, exceeding expectations for a rise of 0.7%.  Core sales were in line with the rise in the headline figure, and printed a gain of 1.1% instead of 0.6% that was predicted.

The US economy is consumer based, making this figure even more important than in other countries. Is the US economy really improving? This figure could contribute to a tighter monetary policy from the Fed when Operation Twist ends at the end of the year.

In addition, figures for August were revised to the upside: the headline number was revised from +0.9% to +1.2% and the core number was revised from 0.6% to 1.1%. So, the total volume is even bigger.

This news pushed USD/JPY a bit higher, but the pair finds it hard to cross the 78.80 line at the time. EUR/USD slid back under the 1.2960 line.

The positive number adds to the good Non-Farm Payrolls report and shows that the US could continue growing slowly for more time. However, not all the numbers released today were positive: the  Empire State Manufacturing Index rose to -6.2 points, but remained in negative ground. This was also less than the -4.5 points that was expected.

Further reading:  The dollar in the QE-Infinity Era