Andrew Grantham and Royce Mendes, analysts at CIBC point out that US data disappointment, like the recent retail sales report, could become more common and hit the US dollar.
“While bond yields remained lower, the US$ quickly recovered the ground it lost immediately after December’s ugly retail sales report. It’s true that we should never read too much into just one bad number, particularly in the highly revised advance retail print, but even if we add the largest revision seen in recent years it would still be a disappointing result.”
“And with our expectations that the US economy will slow this year, as others such as the EZ begin to see a stabilization in growth rates, data disappointments could become more common in the US and dollar investors should certainly take note.”
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