Strong US Retail Sales drives dollar and stocks higher

Strong US Retail Sales drives dollar and stocks higher

After uneventful overnight trading, this morning’s release of surprisingly upbeat US Retail Sales drove the dollar and equities higher, wrapping up a positive week for both markets. Bond yields edged higher on the news, but at 1.32%, UST 10Yr yields remain near the lower end of a volatile week. Traders are struggling to keep up with event-risks related to Delta variant news, inflation expectations/actions by central banks, and corporate earnings. Oil and gold prices are unchanged.

“If you’re not confused, you’re not paying attention."
Tom Peters
  • FX Rates
    July 16, 2021

    Rates are not real time. Rates are today's indicative mid-market rates as of time of publishing, which may vary. Please contact SVB for a current quote.


  • USD

    The dollar is higher on the day, and ending a week of broad strength versus it’s peer currencies. This morning’s Retail Sales for June were much better than expected and a big improvement over May’s negative figures. Day-to-day volatility in the FX market remains low, as do movements in the stock and bond markets, which may continue for the remainder of the summer.

    GBP

    The UK pound is lower and headed for its worst week in a month against the US dollar. Earlier in the day, the pound had rallied by 0.5% on news that UK companies added staff in June at a record pace. A economic affairs committee at the House of Lords is challenging the Bank of England’s view that inflation is transitory. Traders await for the next Bank of England meeting on August 5th.

    EUR

    The euro is flat overnight, but trading in a relatively narrow $1.1790-1.1820 range. Inflation data for June in the eurozone came in as expected and unchanged from May – CPI YoY at 1.9% and CPI MoM at 0.3%. ECB member Ignazio Visco emphasized the need for the ECB to keep monetary policy supportive of the economic recovery and to protect its financial markets from higher interest rates in the US.  

    CAD

    The Canadian dollar moved little overnight, but trades not too far from yesterday’s weakest level since April at 1.2614. After numerous delays, PM Justin Trudeau laid out a timeline for reopening Canada’s border to the US and overseas visitors -- mid-August for the US and September for visitors from other countries.

    ASIA/PACIFIC

    The Japanese yen is the weakest currency overnight. The Bank of Japan left its monetary policy unchanged today, but lowered its expectations for economic growth after taking into account new Covid restrictions and a “no-fan” Olympics, which start next week.

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Scott Petruska
WRITTEN BY
Scott Petruska

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