Why the US Dollar Slips After Today’s Heavy Data List – ForexLive | Jewelry Dukan

US initial jobless claims were strong, including the best unadjusted numbers on record, but the dollar cooled on August retail sales data.

The headline appeared strong at +0.3% versus an expected flat reading, but a deeper examination of the numbers painted a different picture. First of all, the July data was revised to -0.4% from 0.0%, so it started from a lower base. Second, sales excluding the volatile autos, gasoline and building materials categories were flat compared to +0.5% expected. This was also reinforced by a revision in the previous year from +0.8% to +0.4%.

So overall, the Fed’s report should provide some indication that consumers are softening. A notable feature of the report is that new car sales were particularly strong, which one would not expect with a cautious consumer and rising interest rates. However, I suspect this is due to rising deliveries of cars ordered much earlier as supply chains improve.

In any case, the US dollar is trending downwards. The implied odds of a 100 basis point rate hike by the Fed have dropped to 21% from 35% yesterday.

There’s still a lot to sort out here, but as the Fed, watching these numbers, I’m starting to see signs of a slowdown in inflation. The Philly Fed’s price paid component was also at its lowest since December 2020. The decline in the Empire survey was similar.

FX moves have been tentative so far but EURUSD has crept back above parity and I think there is room for some more relief.

EUR

EUR

The Euro (EUR) is the official currency of the European Union (EU) and 19 out of 27 member states at the time of writing. It is the world’s second most traded currency in foreign exchange markets after the US dollar. The euro was originally introduced on January 1, 1999, replacing the European currency unit. Banknotes and physical euro coins did not come into circulation until 2002. When it was introduced, the euro replaced the national currencies in the participating EU member states. The increase in its value since then and its importance in the world market have helped solidify its status as one of the most important currencies in today’s foreign exchange market. Along with the USD, the currency pair is by far the most important for forex due to its exposure to the two main economic blocs. What factors affect the EUR? There are several factors that affect the euro. Like most currencies, monetary policy is the most influential, in this case referring to the European Central Bank (ECB). The ECB is responsible for regulating monetary policy, the money supply, interest rates and the relative strength of the euro. Euro currency traders are routinely tuned in to any ECB decision or announcement for this reason. With 19 sovereign member states, the euro is particularly vulnerable to political developments. Recent examples include the Greek debt crisis and Brexit, which could seriously affect the euro. Finally, economic data from the EU or from important member states such as Germany, France, Spain and others are also closely monitored. These include retail sales, unemployment claims, gross domestic product (GDP) and others.

The Euro (EUR) is the official currency of the European Union (EU) and 19 out of 27 member states at the time of writing. It is the world’s second most traded currency in foreign exchange markets after the US dollar. The euro was originally introduced on January 1, 1999, replacing the European currency unit. Banknotes and physical euro coins did not come into circulation until 2002. When it was introduced, the euro replaced the national currencies in the participating EU member states. The increase in its value since then and its importance in the world market have helped solidify its status as one of the most important currencies in today’s foreign exchange market. Along with the USD, the currency pair is by far the most important for forex due to its exposure to the two main economic blocs. What factors affect the EUR? There are several factors that affect the euro. Like most currencies, monetary policy is the most influential, in this case referring to the European Central Bank (ECB). The ECB is responsible for regulating monetary policy, the money supply, interest rates and the relative strength of the euro. Euro currency traders are routinely tuned in to any ECB decision or announcement for this reason. With 19 sovereign member states, the euro is particularly vulnerable to political developments. Recent examples include the Greek debt crisis and Brexit, which could seriously affect the euro. Finally, economic data from the EU or from important member states such as Germany, France, Spain and others are also closely monitored. These include retail sales, unemployment claims, gross domestic product (GDP) and others.
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