Dollar steadied despite dismal sales data

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Dollar steadied despite dismal sales data, trade talk in focus

US Dollar, Japanese Yen, US retail sales data & trade talk trending points

  • Dollar remains steady, despite tottering nine-year low retail sales data in December
  • Yen gains against USD, signally a clawback for American Dollar
  • Traders have been looking on to trade talk headlines for directions
  • No change of fate for euro, as it slumped further by 0.2 percent against the American Dollar

Dollar holds on despite a nine-year low retail sales in december, 2018

On Friday, the 15thof February, the American Dollar appears to be steadied for now, as trade talk seems to be overshadowing a nine-year low US retail sales data in December, signalling seeping slowdown over the US economy during the end of the year.

Following the release of the data, the American dollar had moved sideways for a while, yet it became steadied on Friday (the 15thof February), since the optimism over trade talk had outstripped the gloomier outlook of a slowing US economy.

The nine-year low retail sales data came out of the blue and surprised many, as Wall St. forecasted a +0.1 percent reading, meanwhile a group of reporters and analysts predicted a +0.2 percent figure, while the original data had displayed a 1.2 percent down retail sales data in December.

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Apart from that, the number of Americans filing for unemployment benefits for the first time had also increased last week, triggering further questions whether the US economy has been leaning towards a slowdown too quickly.

Followed by the end of recent round of high-level trade talk between US and China, investors are eyeing the trade talk headlines for directives and as of now, the traders are betting in favour of American dollar, since there would be another round of trade talk next week in Washington and an official of US agriculture department had revealed that the US president Donald would likely to meet the Chinese PM Xi Jinping later on March.

Adding further bullish wind, the market has been chattering about an extension of tariff truce. Overall, the American dollar seems to be well-supported despite a slowing economy.

 US Dollar daily price chart

US dollar daily price chart

During today’s intra-day trading, the US dollar remained steadied, and had been an average of 0.2 percent up against major currencies to 97.1. The Euro remained downbeat following release of disappointing PMI data from Germany & Italy, meanwhile the Great Britain pound gained over 0.5 percent against American dollar, residing closer to its initial resistance level at 1.29.

Bottom Line

Although, USD had been trying to show-off its strengths despite a tottered economy, the proof of which could be revealed through multiple data released earlier this week from US Labour department. Apart from that, the US treasury department & department of commerce had stopped releasing data due to increased volatility in the Wall St. and a federal government shutdown.

Looking ahead towards the next week, the American dollar outlook appears to be bearish, although huge volatility is expected due to trade talk headlines. At this standpoint, the American dollar may follow its jigsaw pattern trend and lowered down below 96 level next week, as it had been displaying during the last couple of months, trading between 95.60-97.20.

Read more on American dollar here

 [Disclaimer: The content of this article is personal opinion and should not be considered as investment advice or suggestion towards any trading activity.]

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