Forex market Update - US Dollar

The greenback continued to be supported by the much higher then expected Advanced Retail Sales figure, which printed at a massive 1.4% vs. 0.9%.

The renewed strength, after a downwardly revised decline of 0.4% in June, was broad based across all categorizes.

Perhaps the most interesting figure, and the one which most of the USD rally has been based, is the core retail sales. This number excludes transportation, gasoline and construction materials and is directly related to estimates of consumer spending in GDP.

Traders bid USD on the basis that US growth might not be slowing as the FED had anticipated and further tightening would be warranted. The Fed Fund rates estimates jumped to 37% from 25% on this data.

Now that we are starting to see the growth side of the FOMC equation, this week traders will be focused on inflation i.e PPI and CPI.

There are no US releases today.