Retail Sales Boost Greenback
US government retail sales figures came out better than expected excluding autos. The figures showed an increase in April ahead of forecasts.
After positive data speculation has risen that the Federal Reserve will halt cutting the benchmark interest rate. The USD gained against the euro as well as the yen after the figures were released.
The dollar rose to $1.5461 against the euro, compared to $1.5553 yesterday. The greenback also climbed against the yen from 103.75 to 104.51.
The government data showed that excluding autos, US retail sales rose 0.5 percent during April. The average forecast of 74 economists surveyed by Bloomberg News was for a 0.2 percent increase. On April 30 we Finance Exhcange reported on speculation that the Federal Reserve had finished it’s period of interest-rate cuts.
The risk of inflation continues with Pianalto of the Cleveland Federal Reserve saying interest-rate cuts since September are “compatible with a low and stable inflation rate,” prices are rising “somewhat faster than I would prefer.” - Bloomberg
The Federal Reserve will have its next meeting on June 25. Futures traders on the Chicago Board of Trade show a 90 percent chance of the Fed holding the interest rate at 2 percent.
Technical Chart: EURUSD 1-hour
The 1-hour EURUSD chart shows a double top formation spanning the 12th and 13th May. Since which we have seen the USD gain against the euro by sending the chart into a down-trend.
Notice the downwards sloping resistance line, as well as the rising support line indicating a narrowing in the price action. If the price fails to break the support line, we should see a dollar sell-off with some strengthening for the euro.
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Comments
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