US Dollar Shrugs Off Unexpected Rise In Retail Sales
By Grace Cheng on April 14, 2008 | More Posts By Grace Cheng | Author's Website
US retail sales came out better than forecast on Monday, increasing by 0.2% in March. Sales declined a revised 0.4% in February, instead of an initially estimated 0.6% decline. The majority of the market has expected sales to fall by 0.1%, so this is unexpected, given that the US is most likely in a recession now. This report is a main indicator of US consumer spending, and consumer spending constitutes about 70% of gross domestic product, the broad measure of economic activity in the US. After the release of the report, the US dollar initially rose against the Euro and Japanese yen, but later gave up its advance and fell back down. EUR/USD dipped to a session low of 1.5670 but has since bounced back up above 1.5800. USD/JPY slid back below 101.00. Indeed, the forex market isn’t so concerned about the the presumed highlight of USD weakness in the G7 statement. As long as there is no coordinated intervention among the various central banks, traders will take it as just all words but no action. Risk aversion is the current theme in the forex and stock markets as investors and traders watch out for earnings reports by Merrill Lynch and Citigroup this week. Both are expected to report heavy write-downs and job cuts.
ECB’s Commitment
ECB’s Yves Mersch said Monday there is no scope for an interest rate cut in the Eurozone this year as the ECB may need to revise up its inflation outlook.
Tuesday:
UK CPI, retail price 0830 GMT
German ZEW 0900 GMT
US PPI, Empire manufacturing 1230 GMT
US TICS 1300 GMT
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