US retail sales rise by 0.2%, Core Sales by the same scale. This is worse than expected and slower than last month rises of 0.5% and and 0.6%.
Early expectations stood on a gain of 0.6% in the headline figure and a rise of 0.5% in the core figure. EUR/USD is dropping in range following the release – classic risk aversion behavior.
Also other currencies are falling against the US dollar as a weaker US means a weaker global economy and “risk†is put aside. The dollar and the yen are the “safe haven†currencies at the moment, while the Swiss franc is currently grouped with the risk currencies.
Retail sales are usually an important piece of data as they reflect what customers are actually doing. This is of special importance in the US, where most of the economy is based on consumption.
Yet today, the focus in the US is on the Federal Reserve. Ben Bernanke and his colleagues are set to make the last rate decision for 2011, and there is a high probability that no change will be made.
See the FOMC Preview for details.
In addition, the European debt crisis continues to dominate the headlines and the moves in currencies.
