Tue, Jun 18, 2024

USD: US Retail Sales Beat Expectations: Up 0.7% in March

The Middle East tensions are melt down after the Iran came to cool statement, Further tensions in the middle east is not taken place from our side. US already closed relationship with Iran, So Iran and Israel conflict now come to an end. US retail sales for month of March came at 0.70%  from 0.90% previous month and 0.40% decline is expected. So Domestic data continuously boosted US Dollar against counter pairs.

USD Index is moving in box pattern and market has reached resistance area of the pattern

USD Index is moving in box pattern and market has reached resistance area of the pattern

On Monday, the US Census Bureau released data indicating a 0.7% increase in retail sales for March, reaching a total of $709.6 billion. This rise follows a revised 0.9% increase (originally reported as 0.6%) in January and surpasses market expectations, which had predicted a 0.3% growth. Excluding automobile sales, retail sales saw a notable increase of 1.1% during the same period.

USD Demand Petrol Gases and Coal buying in terms of US Dollar so demand automatically increasing for US Dollar.

According to the press release, “Total sales for the January 2024 through March 2024 period were up 2.1% from the same period a year ago.” Additionally, it stated that “Retail trade sales were up 0.8% from February 2024, and up 3.6% above last year.”

USD: US Retail Sales Beat Expectations in March

The Middle East tensions are melt down after the Iran came to cool statement, Further tensions in the middle east is not taken place from our side. US already closed relationship with Iran, So Iran and Israel conflict now come to an end. US retail sales for month of March came at 0.70%  from 0.90% previous month and 0.40% decline is expected. So Domestic data continuously boosted US Dollar against counter pairs.

USDCAD is moving in Ascending channel and market has fallen from the higher high area of the channel

USDCAD is moving in Ascending channel and market has fallen from the higher high area of the channel

Government data released on Monday revealed that retail sales in the United States exceeded expectations in March, indicating stronger consumer demand than anticipated.

According to the Commerce Department, retail sales in the US increased by 0.7 percent last month to reach $709.6 billion, following a revised 0.9 percent uptick in February.

Comparing the figures to a year ago, March’s retail sales were 4.0 percent higher, signaling a notable year-on-year growth.

The report highlighted a significant 2.1 percent surge in gas station sales from February to March, contributing significantly to the overall increase. Excluding gas stations, overall sales still showed a respectable rise of 0.6 percent.

However, sales at motor vehicle and parts dealers experienced a slight decline of 0.7 percent in March, while electronics and appliance stores witnessed a more substantial decrease of 1.2 percent.

us economy growing

Despite the resilience in consumer spending that has supported US economic growth in recent times, analysts anticipate a cooling in demand this year due to factors such as cost fatigue and elevated interest rates. Additionally, households are expected to draw down on savings accumulated during the Covid-19 pandemic.

Analysts at Pantheon Macroeconomics cautioned that retail sales figures are subject to significant revisions, making them difficult to forecast accurately. Nonetheless, they suggested that the increase in gasoline sales could be attributed to rising gas prices.

Looking ahead, Pantheon anticipates a slowdown in consumption during the first quarter of this year compared to the fourth quarter of last year.

USD: Dollar Soars, Yen at Its Weakest Since 1990 After Robust U.S. Retail Sales

The Middle East tensions are melting down after the Iran came to cool statement, Further tensions in the middle east is not taken place from our side. US already closed relationship with Iran, So Iran and Israel conflict now come to an end. US retail sales for month of March came at 0.70%  from 0.90% previous month and 0.40% decline is expected. So Domestic data continuously boosted US Dollar against counter pairs.

USDJPY has broken Ascending Triangle in upside

USDJPY has broken Ascending Triangle in upside

On Monday, the dollar surged to its highest level since early November against a basket of currencies, concurrently driving the yen to its lowest point since 1990. This move followed a robust increase in U.S. retail sales for March, which exceeded analysts’ expectations.

Retail sales in March climbed by 0.7%, with February’s data revised upwards to show a rebound of 0.9%, rather than the initially reported 0.6%. Economists surveyed by Reuters had anticipated a more modest 0.3% rise in March retail sales. It’s important to note that retail sales figures primarily represent goods and are not adjusted for inflation.

The strengthening of the greenback can be attributed to persistent inflation and robust economic growth, leading investors to postpone their expectations for when the Federal Reserve might commence interest rate cuts. Additionally, there’s a shift in market sentiment towards fewer anticipated rate cuts by the Fed compared to earlier projections.

Brad Bechtel, the global head of FX at Jefferies in New York, remarked on the trend, stating, “U.S. data just keeps coming better and better than expected.”

Traders are now pricing in less than two 25 basis points cuts by the end of the year, down from the previous expectation of three cuts.

New York Fed President John Williams expressed confidence in Fed policy, stating that it’s in a good place and remains restrictive. He indicated his belief that interest rate cuts are likely to commence this year.

The yen has notably weakened due to the strength of the U.S. dollar and the substantial interest rate differential between the U.S. and Japan. Japanese monetary authorities have escalated warnings about potential intervention to support the currency. Finance Minister Shunichi Suzuki reiterated Tokyo’s readiness to take action, closely monitoring currency movements.

More lockdown in Japan causes the Japanese Yen to slow down

While Japanese officials may intervene in the currency market, Bechtel suggests that it’s more likely if the yen is significantly underperforming, rather than during periods of broad-based dollar strength. He suggests that intervention might occur at a key level such as 155.


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