USD Backs Away from Edge after Surprsingly Strong Retail Sales
- US Advance Retail Sales beat expectations handily – both current and prior beat.
- Core consumption figure beats too, with positive revisions to priors.
- EURUSD retreats to $1.2424 after report.
November US Advance Retail Sales beat the Bloomberg News consesus forecast handily, helping buffer the US Dollar from deteriorating technical conditions. The headline reading of +0.7% cruised by expecations of +0.4%, with the prior reading revised higher as well. With US labor market growth accelerating, signs that consumption is increasing – the largest component of GDP, accounting for nearly 70% of the headline figure – only bolster the US Dollar’s fundamental stand headed into 2015.
Secondary labor market data this morning was solid as well. US Initial Jobless Claims edged lower by -3K to 294K, holding below the four-week average of 299.3K. In recent months, sub-300K claims have correlated with NFP readings above +200K; if consumption trends remain elevated, another strong month of payroll gains may be ahead for December.
Here’s a summary of the data this morning that contributed to US Dollar price action:
- USD Advance Retail Sales (NOV): +0.7% versus +0.4% exp, from +0.5% (revised higher from +0.3%) (m/m).
- USD Retail Sales Ex Auto (NOV): +0.5% versus +0.1% exp, from +0.4% (revised higher from 0.3%) (m/m).
- USD Retail Sales Ex Auto and Gas (NOV): +0.6% versus +0.5% exp, from +0.7% (revised higher from +0.6%) (m/m).
- USD Retail Sales Control Group (NOV): +0.6% versus +0.5% estimated, from +0.5% (m/m).
- USD Initial Jobless Claims (DEC 6): 294K versus 297K expected unch.
- USD Continuing Claims (NOV 29): 2514K versus 2344K expected, from 2372K (revised higher from 2362K).
EURUSD 1-minute Chart: December 11, 2014 Intraday
EURUSD fell to a low of $1.2413 on the back of the improved US consumption data before finding support.The key level to watch in EURUSD the next few days is $1.2455, which produced resistance after the ECB meeting on Thursday and the US NFP report on Friday. At the time this report was written, EURUSD was last quoted at $1.2424.
--- Written by Christopher Vecchio, Currency Strategist
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