- USD Strength Subsides Slightly
- Better Than Expected US Retail Sales
- Stock Trading Continues Cautiously
The EUR/USD forex market lifted slightly as the Euro took advantage of a breather in the Dollar. This pushed the pair above 1.18 though trading remains cautious with some suspecting a ‘Dead Cat Bounce’ from the Euro. More positive than expected US retail sales though have certainly helped the case for the Euro even as they face up to their own challenges with a rate hike rumored to be coming as early as 2024. Final Eurozone inflation figures due later could also move the needle. On Wall Street, traders remain cautious despite the positive data as the fallout from China continues to reverberate.
Dollar Dip Opportunity Taken by Euro
Those forex trading the Euro today took advantage of a “foot off the gas” moment from the US Dollar. The fundamentals behind this may still require some support, but following a prolonged period of strength, it is nothing new for the safe-haven Dollar to have a session off.
This has been welcomed by those trading the Euro as a chance to regain some much-needed ground. With that said, there is not a great deal to support any strength from the Euro given that the bloc is still awaiting final inflation figures that remain a concern. These will be a key driver for the currency moving into the weekend, as will US consumer confidence numbers due later today. Many analysts suspect this to be temporary respite only for the Euro.
Upside Surprise From US Retail Sales
One factor in the slight dip from the Dollar is like to be the better than expected retail sales figure for August. This will have given some more confidence to the market that has been subsequently reflected in prices from the forex brokers. Core figures also came in better than had been expected.
The sales figures for August had been expected to show a decline of as much as 0.7% with COVID Delta cases a concern yet again in several states. This does not seem to have had the expected impact though as the figure actually came in positive at +0.8%. There will be hopes that consumer confidence figures in the US may also be sporting a similar surprise.
Wall Street Remains Cautious
The major indices on Wall Street are all in negative territory for the month. They also had a slow start to the week, and although they have improved, posting minor gains yesterday, it would seem the negative September figures will remain.
Not even the retail sales beat looks likely to rescue the numbers for this month as early trading moves slowly. Friday also marks the start of a historically weak period for the equities market. Undoubtedly, the impact of COVID pressure has been felt on the street. This has also not been helped from abroad with the big story being the potential collapse of Chinese property giant Evergrande bringing about worldwide pressure.