After a strong spell, the dollar dipped yesterday morning due to disappointing US retail sales. Despite beating forecast, they failed to make up for the -1.6% fall seen in December. The core retail sales also failed to recover from their shortfall in December, although they were also stronger than expected.
Retail sales data comes just a day ahead of the latest inflation figures, which are expected to show consumer price pressures remaining elevated thus far in 2019.
Speaking over the weekend, Chair of the Federal Reserve, Jerome Powell, said that the US economy is not exposed to risks severe enough to change its interest policy rate stance. After yesterday’s retail sales and today’s inflation figures, it will be interesting to see if any action is taken from the Fed as a result.
The tables turned yesterday as pound rose against the dollar. This was caused by increased hope with regards to a breakthrough in Brexit talks. Today’s vote will determine whether the strength of the pound against USD will continue. The pound is rife with volatility at the moment, so it really is impossible to predict how it will fare against the dollar in the coming days.
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