USD is Weak

During the pre-Wall Street open, U.S. Retail Sales for June hit newswires. The figures beat consensus estimates and came in on schedule month-over-month. Thus far, USD backers have enjoyed the news, bidding the Greenback significantly higher versus the Swiss franc and Euro.

U.S. Retail Sales For June Beats Expectations

As one of the only key events this week on the U.S. economic calendar, Retail Sales has brought some action to the USD. Here are the highlights of today’s report:

Event                                                    Actual    Projected   Previous

Retail Sales (June, MoM)                     0.4%           0.1%             0.4%

Retail Sales Control Group (June)      0.7%           0.3%            0.6%

Both figures are well above expectations and on par with previous releases. This suggests that economic activity in America remains strong and inflation is due to begin increasing any time. Ultimately, the figures shouldn’t shift the odds of a July 31 rate cut. However, they do suggest that the FED’s new accommodative policy may be short-lived.

A Bullish Breakout In The USD Index

September USD Index futures are on the bull, driving toward the 97.000 handle. Bids have hit the market in mass since the U.S. Retail Sales report, boosting intraday highs to 96.995.

September USD Index Futures (DX), Daily Chart
September USD Index Futures (DX), Daily Chart

Overview: The past two sessions have been good ones for the Greenback. Subsequently, USD Index futures are within a stone’s throw of the key 97.000 psychological level. If the September USD Index takes out this area, expect a test of the June 18 spike high (97.265) to develop quickly.

Later today, FED Chairman Jerome Powell is once again scheduled to take the stage. The engagement kicks off at 1:00 PM EST. If you are trading the USD, be on the watch for enhanced volatility as Powell’s prepared comments are released shortly before the address.

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