Daily FX Trading Update – US Retail Sales Post Upside Surprise – June 12, 2015

Dollars on market chart

The US dollar was able to recover against most of its FX trading rivals in yesterday’s trading sessions, thanks to stronger than expected retail sales data. The headline figure showed a 1.2% gain versus the projected 1.1% increase while the core figure indicated a 1.0% increase versus the estimated 0.7% uptick. Apart from that, the April headline retail sales reading was upgraded from 0.0% to 0.2%. Import prices also showed healthy gains, suggesting that domestic price levels might pick up soon and keep the Fed on track to hike interest rates by September.

For today, the PPI reports are up for release and the headline figure is slated to gain by 0.4% while the core PPI could print a 0.1% uptick. The preliminary UoM consumer sentiment index is also due.

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The euro gave up ground to most of its forex counterparts due to the lack of positive updates from Greece. Data from the euro zone came in mixed, with the French non-farm payrolls report showing a flat reading instead of the projected 0.1% decline and the country’s CPI posting a weaker than expected 0.2% gain. German WPI and euro zone industrial production data are up for release today and downbeat results might lead to more euro weakness.

The pound moved back and forth in recent trading, as there were no major reports to give it any clear direction. Only the medium-tier construction output report is due today and it could show a mere 0.1% uptick following the previous 3.9% gain, although stronger than expected data could lead to more gains for the currency.

The yen had a mixed performance yesterday since the lack of top-tier data left the currency reacting to its counterparts. Japan’s BSI manufacturing index slipped from 2.4 to -6.0 instead of improving to the estimated 3.2 reading. For today, the revised industrial production data is due, along with the tertiary industry activity index.

The Aussie popped higher after the release of stronger than expected Australian jobs data for May, which indicated a 42K increase in hiring and a drop in the jobless rate to 6.0%. However, the currency was unable to hold on to its gains as traders doubted the reliability of the report. The Kiwi continued to give up ground after the RBNZ decided to cut interest rates earlier on.

To contact the reporter of the story: Samuel Rae at samuel@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.