Forex today: Dollar takes-off on U.S. data
|- In Forex today, the U.S. Dollar gained, (DXY 97.405 highs).
- US Retail Sales beat expectations and help to dial back rate cut expectations.
Treasury yields rose following solid US data, while markets await a speech from Federal Reserve's Chair Powell who repeated the mantra and made no shakes in FX specifically, although gold rallied then dropped significantly, as did WTI in improvements in the Iran saga - Links below to both stories, but with respect to the Fed', we are all priced in for 31bp worth of easing at the 31 July meeting.
The US 2-year treasury yields climbed from 1.84% to 1.87% on the Retail Sales, (see below), while 10-year yields climbed from 2.09% to 2.14% before falling back to 2.10% as U.S. stocks stumbled, unable to attract further demand following yesterday's closing record highs.
As for US data, US Retail Sales beat expectations in June, rising 0.4% m/m (0.2% expected) with core sales up a solid 0.7% (0.3% expected).
"On a three-month annualised basis, sales are up 7.5% with ex-auto and gas up 6.0%. The gains were broad-based with only electronics seeing a small pull back, suggesting that the consumer is alive and well. Factories were looking less rosy in June though, with industrial production flat on the month, a bit weaker than expected,"
analysts at ANZ Bank explained.
Currency action
Amid Brexit uncertainties, whereby Boris Johnson and Jeremy Hunt said overnight that they were prepared to abandon the Irish backstop plan and that they will not accept a five-year time limit or a unilateral exit clause from the backstop, the labour market showed that the unemployment rate remained at 3.8%, which was its lowest level since the mid-1970s. However, the employment growth did slow and GBP/USD dropped from 1.2517 to 1.24 the figure.
- Elsewhere, EUR/USD lost ground from 1.1260 to just above 1.1200, with plenty of talk about the ECB’s easing options.
- USD/JPY rallied from 107.95 to 108.25 on the retail sales data.
- AUD/USD dropped to 0.7010 as President Trump turned up the trade war heat again saying he could impose more tariffs on China whenever he wanted to.
- NZD/USD dropped from 0.6735 to 0.6696 while the GDT dairy auction resulted in a 2.7% gain in prices overall.
Key notes from overnight:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.