USD - United States Dollar
The US dollar gained across the board after better than expected retail sales data released on Thursday and a slight drop off in global risk appetite. The US Dollar Index was up 0.24%, trading at 93.16 at the time of writing.
US consumers continued to spend despite the challenges imposed by this latest COVID-19 wave. Total retail sales jumped 0.7 %, a robust print considering a 3.5% decline in auto sales. Excluding auto purchases, retail sales jumped 2%, a positive surprise and suggests perhaps the US Federal Reserve can downgrade the weight attributed to this latest Delta surge when assessing monetary policy. The print prompted a strong market reaction and drove the USD toward a fresh weekly high.
Expect this volatility to continue in the run up to next Wednesday’s Fed meeting. Rates will likely remain unchanged, however it will be interesting for investors to assess Fed Chair Jerome Powell’s tone around inflation data, considering the ongoing stagflation vs. transitory inflation debate.
The euro continued to be knocked by the upcoming German elections. As they have had a stable government under Angela Merkel for the past 16 years, it is likely the euro will continue to experience a dampening effect for the next week or two until the election result. EURUSD was down 0.27%, trading around 1.1734 at the time of writing.
GBPUSD tumbled below 1.38 as risk sentiment gave a boost to safe haven currencies like USD. With over 10 central bank meetings next week, it is likely that the majority of currencies will experience a degree of increased volatility. GBPUSD was down 0.24%, trading around 1.3759 at the time of writing.
1.173 - 1.1786 ▼GBP/USD:
1.3745 - 1.3812 ▼AUD/USD:
0.7268 - 0.7321 ▼USD/CAD:
1.2639 - 1.276 ▲