News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • 🇫🇷 Business Confidence (SEP) Actual: 106 Expected: 109 Previous: 110 https://www.dailyfx.com/economic-calendar#2021-09-23
  • Heads Up:🇪🇸 GDP Growth Rate QoQ Final (Q2) due at 07:00 GMT (15min) Expected: 2.8% Previous: -0.4% https://www.dailyfx.com/economic-calendar#2021-09-23
  • Heads Up:🇪🇸 GDP Growth Rate YoY Final (Q2) due at 07:00 GMT (15min) Expected: 19.8% Previous: -4.2% https://www.dailyfx.com/economic-calendar#2021-09-23
  • It’s important for traders to be familiar with FX spreads as they are the primary cost of trading currencies. Understand a pair's spread here: https://t.co/zEEUHZBx7g https://t.co/JzYaIqZgAE
  • Heads Up:🇫🇷 Business Confidence (SEP) due at 06:45 GMT (15min) Expected: 109 Previous: 110 https://www.dailyfx.com/economic-calendar#2021-09-23
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here: https://t.co/8A1QhwMVKo https://t.co/Lxp7fJaM8Q
  • (ASEAN Tech) US Dollar Climbs Post FOMC. USD/SGD, USD/THB, USD/PHP, USD/IDR in Focus #USD $USDSGD $USDTHB $USDPHP $USDIDR #ASEAN https://www.dailyfx.com/forex/technical/article/special_report/2021/09/23/US-Dollar-Climbs-Post-FOMC-USDSGD-USDTHB-USDPHP-USDIDR-in-Focus.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/xcp3hdGaXe
  • 🇳🇱 GDP Growth Rate QoQ Final (Q2) Actual: 3.8% Expected: 3.1% Previous: -0.8% https://www.dailyfx.com/economic-calendar#2021-09-23
  • 🇳🇱 GDP Growth Rate YoY Final (Q2) Actual: 10.4% Expected: 9.7% Previous: -2.4% https://www.dailyfx.com/economic-calendar#2021-09-23
  • What is your forex trading style? Take the quiz and find out: https://t.co/YY3ePTpzSI https://t.co/9xP8YlxWSv
Point, Taper: Improved July Retail Sales Report Lifts US Dollar as Yields Jump

Point, Taper: Improved July Retail Sales Report Lifts US Dollar as Yields Jump

Christopher Vecchio, CFA, Senior Strategist

THE TAKEAWAY: Headline figure misses but prior revisions and beats on core readings gives July report overall positive tone > Consumption trends in US remain bolstered despite fiscal headwinds, weak wage growth > Effective notch in the ‘taper QE3 in September’ column > USDJPY BULLISH

US economic data has been mixed a bit of late (especially on the ever-important inflation and labor market fronts), but the release of July consumption figures has lifted the tone regarding the US economy. The July Advance Retail Sales report showed that consumption remains strong in the near-term, though the uptick in US interest rates may be having an adverse impact on automobile sales.

The headline figure came in slightly weaker than expected at +0.2% m/m, but the prior revision up by two-tenths to +0.6% m/m negated the disappointment. The major improvement seen – and perhaps a better pure indicator of US consumption – was in the Sales ex Auto figure, at +0.5% m/m; both the Sales ex Auto June and July figures were revised higher by +0.1%.

US Treasury yields have jumped on the news (the 10-year note yield increased from 2.673% to 2.693% at the time this report was written), while precious metals have fallen, and the US Dollar has rallied – a clear indication of investors realigning their bias towards the Federal Reserve tapering QE3 in September. Here are the figures stoking the shift in sentiment:

- Advance Retail Sales (JUL): +0.2% versus +0.3% expected, from +0.6% (revised higher from +0.4% (m/m)

- Sales ex Auto (JUL): +0.5% versus +0.4% expected, from +0.1% (revised higher from 0.0%) (m/m)

- Sales ex Auto & Gas (JUL): +0.4% as expected, from 0.0% (revised higher from -0.1%) (m/m)

Read more: ‘Septaper’ On? US Dollar Leads as Asian-Pacific FX Slides to Start Week

USDJPY 1-minute Chart: August 13, 2013

Point_Taper_Improved_July_Retail_Sales_Report_Lifts_US_Dollar_as_Yields_Jump_body_x0000_i1027.png, Point, Taper: Improved July Retail Sales Report Lifts US Dollar as Yields Jump

Charts Created using Marketscopeprepared by Christopher Vecchio

Following the report, the USDJPY advanced from ¥97.99 to as high as 98.23, before falling back to 98.16, at the time this report was written. Similar price action was observed in the other components of the Dow Jones FXCM Dollar Index (Ticker: USDOLLAR), with: the EURUSD falling from $1.3291 to 1.3250; the AUDUSD falling from $0.9134 to 0.9105; and the GBPUSD falling from $1.5463 to 1.5438.

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, please fill out this form

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES