Soft US Retail Sales Another Blot On The Landscape, But USD Survives
After some weakness seen in PPI and CPI this week, retail sales come in weaker than expected to add to the soft data run. Both headline retail sales, as well as the retail control group (which takes into account changes in spending habits between the consumer goods), have registered a meagre 0.1% rise vs 0.4% expected in each case. The previous month has been revised higher though to offset some of the negative sentiment, but it looks like USD selling has run its course this week as the DXY continues to grind higher as it was doing so a few hours back.
Markets have their set patterns and having relinquished some notable ground already this week, we may be seeing some pre-weekend profit taking - especially with the likes of EUR/USD running into strong offers above 1.1700 while USD/JPY continues to press for another move above 112.00.
None of this has any reflection on the data which has just come out, but we have been accustomed to this on a Friday afternoon, and we also still have some industrial and manufacturing production data to come out later on this afternoon.
EUR/USD support is now expected into the mid 1.1600's, though we note 1.1620-25 as a strong level to contend with down here. USD/JPY looks more inclined to test 112.50, but we expect pre 113.00 to be very well offered. USD/CHF also sees support in the 0.9620-50 area, which has held up well in recent weeks.
Friday price action is not one to really count on as European traders start squaring up for the weekend.