USD Retail sales disappoint – Dollar stumbles

16 October, 2014

Matthew Boyle

Yesterday was a turbulent time in the market as we saw UK unemployment data from the UK, a raft of US retail sales and PPI data and also ECB President Mario Draghi Speech.

In the morning UK unemployment figures showed a positive with a change to the claimant count to -18.6K and an overall reduction in the unemployment rate to 6.0% from an expected 6.1%. Exchange rates saw a small spike as a result however there was almost an instant correction and the gains were eroded quickly. The main news of the day was the US data – US retails sales (YoY) were down -0.3% from an expected -0.1% and all the PPI data also came in poor and under what was expected. Following these results the USD slipped around a cent and a half against GBP. More notable USD against EUR slipped almost 3 cents following the news, which was only recovered in part – gaining back a cent by the end of trading so settling on around a 2 cent loss throughout the day. With the comments from Draghi at the ECB neither here nor there and in essence repeating much of the same it was really the US retail figures and UK unemployment figures that caused movements, with the EUR benefiting massively from USD weakness.

Today we have no major data released, however we do have Eurozone CPI data at 10AM and a raft of USD data this afternoon, including jobless claims and house market index data.

With the huge swing we saw in EUR/USD yesterday all eyes will be on these results and how it will effect this cross. However it will also be an interesting day to see if GBP can make any gains following yesterdays unemployment data, particularly against EUR as this data was in part hidden amidst the news in the U.S.

With a lot of uncertainty in the market at present, many of you with upcoming requirements may like to consider a forward contract particularly those who need Euros. In the last few weeks we have seen GBP>EUR rates erode and have now lost 3 cents – increasing costs of around 2k GBP on a 100k EUR transfer.

So speak to your C.I broker today for some friendly and professional currency broker guidance on how to get the most out of your transfer and avoid disappointment. Currency Index can help you stay well informed and well ahead of the market.