Daily Currency Update

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Retail sales down in August

USD - United States Dollar

US retail sales, excluding automobiles, came in lower than expected and increased less than the previous months.

Core Retail Sales rose 0.7% in August verse a 1% forecast. And spending appeared to slow compared to the previous months. In July retail sales rose 1.9% and in June retail sales rose 12.4%.

In other related news, the Federal Reserve this afternoon releases its last statement prior to the US elections in November. The statement will include the Fed’s projections for inflation and economic growth over the next two years. Keep an eye out for reserve member’s interest rate forecasts.

The US dollar is down against the euro, Great British pound and Australian dollar this morning.

Key Movers

UK inflation for the month of August fell by less than expected when consumer prices rose by 0.2%, this was compared to an expected increase of 0.1% and 1% for the month of July. The pound consolidated against the euro and the US dollar yesterday, both trading within very tight ranges as all eyes now turn to the Bank of England and the Federal Reserve.

The Australian dollar continued its upbeat mood on Tuesday opening at 0.7290. Punching through the 73 US cent handle following the latest release of Monetary Policy minutes, intraday highs were seen at 0.7342. The Royal Bank of Australia noted that the current downturn in economic conditions were not as severe as previously forecasted and were maintaining accommodating settings for as long as required. The board also confirmed the cash rate will not be increased till employment levels and inflation are back at their targeted range.

Expected Ranges

EUR/USD: 1.181 - 1.188 ▲

GBP/USD: 1.286 - 1.299 ▲

AUD/USD: 0.729 - 0.734 ▲

USD/CAD: 1.315 - 1.32 ▼