Daily FX Trading Update: US Retail Sales Disappoint Due to Cold Weather – Mar 13, 2015

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Daily FX Trading Update: US Retail Sales Disappoint Due to Cold Weather - Mar 13, 2015

The US dollar gave back some of its recent FX trading wins when the retail sales report came in weaker than expected. Headline consumer spending slumped 0.6% in February while core retail sales showed a 0.1% decline instead of the projected 0.8% gain. Cold weather conditions weighed on spending for the past month, as it had for the previous couple of months also. For today, PPI data and consumer sentiment figures are up for release and these might be leading indicators for inflation and spending. Strong data could allow the dollar to recover for the rest of the week while weak figures could spur more losses.

The euro took advantage of dollar weakness in yesterday’s FX trading but was still weaker compared to most of its major counterparts. There have been no major reports released from the euro zone yesterday and none are due today, indicating that current trends might still carry on.

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The pound suffered more losses to its FX trading rivals in yesterday’s sessions even though the UK printed a better than expected trade balance. The deficit narrowed from 9.9 billion GBP to 8.4 billion GBP, indicating an improvement in trade activity. However, this wasn’t enough to lend support to the British currency, as traders seem to be doubting the BOE’s upbeat stance and focusing more on the weak data recently.

The franc regained a bit of FX trading ground to the dollar, mostly due to the weakness in US retail sales. There have been no reports released from Switzerland yesterday and none are due today, indicating that the franc could act as a counter currency or take its cue from euro zone data or risk sentiment.

The yen continued to advance as risk aversion stayed in the financial markets. Japanese consumer confidence showed a slightly stronger than expected reading, which led to a bit more support for the yen. Revised industrial production data is up for release today and strong readings could continue to boost the Japanese currency.

The comdolls were in better FX trading shape yesterday, as the Aussie was supported by jobs data which came in line with expectations. Canadian jobs data is up for release today and a 3.5K decline in hiring is eyed, which might be enough to keep the Loonie’s gains in check. The jobless rate is slated to climb from 6.6% to 6.7% but a better than expected result could still support the Canadian currency.

To contact the reporter of the story: James Brennan at james@forexminute.com

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.