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Forex Market Update: Dollar Higher Ahead of Retail Sales Data

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The U.S. dollar traded sharply higher against most traded currencies on Monday as investors waited for closely watched, U.S.’s retail sales data for the month of June, which is expected to show a solid growth.

The retail sales are expected to show a growth of 0.9% in June, and 0.6% (excluding auto sales), according to MarketWatch’s poll. Strong retail sales data could prompt the Federal Reserve to start winding down its economic stimulating measures sooner than expected.

The dollar index, a gauge on U.S. unit’s performance against a basket of six major traded currencies, rose 0.3% to 83.189, up from its previous week’s low of 82.418.

“The Fed has maintained (that winding down of bond buying program) is data dependent and so retail sales data today is key,” said Paul Robson, a currency strategist at RBS, according to Reuters.

The euro was last down 0.52% to trade at $1.3006.

However, gains are likely to be capped as investors are eyeing the Federal Reserve Chairman, Ben Bernanke’s testimony to the Congress later this week.

“We still buy into the idea of relative outperformance of the U.S. economy and that support’s the dollar. But I don’t think we will get another kicker higher on retail sales or on Bernanke’s testimony,” added Robson.

Meanwhile, the Australia dollar traded higher on Monday. The Commodity linked currency was supported by less-than-feared slowdown in the second quarter GDP growth in China. China’s GDP rose 7.5% in the second quarter (Y-O-Y), down from 7.7% growth in the first quarter but in-line with economists’ expectation.








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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.

Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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