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US Dollar Upside Maintained Amid Retail Sales Beat

US Dollar Upside Maintained Amid Retail Sales Beat

Justin McQueen, Strategist

US Dollar Analysis & News

  • Firm Retail Sales to Maintain USD Upside vs Euro
  • US Retail Sales Beat Adds to Slew of Encouraging US Data

Firm Retail Sales to Maintain USD Upside vs Euro

Another firm set of retail sales figures with a beat across the board. Meanwhile, revisions to the prior month’s report were slightly mixed, however, US retail sales nonetheless remain robust. Most notably, the retail sales control group figure rose 1.6% vs expectations for a 0.9% increase, which is important as this is used in several GDP trackers. Therefore, we could begin to see US GDP forecasts slightly upgraded. Once again, this will add to the case for Fed hawks to perhaps urge the committee to speed up QE tapering or if not speed up tapering, possibly to provide a hawkish pivot sooner rather than later.

US Retail Sales Beat Adds to Slew of Encouraging US Data

US Dollar Upside Maintained Amid Retail Sales Beat

Source: Refinitiv

Market Reaction: Price action in the USD has been somewhat muted following the release, with the exception of USD/JPY, which popped higher, alongside US treasury yields. At the same time, US equities have had a rather choppy reaction, whereby the initial move higher has been faded. Going forward, with the data being better than expected, this is likely to keep the pressure on EUR/USD as the Euro struggles with the recent surge in Covid cases. Taking a look at the chart, topside resistance sits at 95.71 and 96.00.

USD Chart: Daily Time Frame

US Dollar Upside Maintained Amid Retail Sales Beat

Source: Refinitiv

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

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