Article Highlights

  • US retail sales: -0.3% in September vs. -0.1% expected, 0.6% in August
  • US core retail sales: -0.2% vs. 0.2% expected, 0.3% previous
  • US PPI: -0.1% vs. 0.1% expected
  • US Empire State manufacturing index: 6.2 vs. 20.3 expected, 27.6 previous
  • US Beige Book report shows modest to moderate growth
  • US Federal budget balance prints 105.8 billion USD surplus vs. 90 billion USD expected, 75.1 billion USD last month
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Geronimoooooo!!! The dollar got slammed across the board yesterday, thanks to weak U.S. data and falling Treasury yields.

Remember that major currency pairs were in tight intraday ranges before the U.S. session. It wasn’t until Uncle Sam printed its retail sales report that forex bulls and bears got fired up. The report showed a 0.3% decline in September when market players were only expecting a 0.1% slip.

The news came alongside reports that consumer confidence and wage growth have also shown recent weaknesses. It also didn’t help that core retail sales, PPI, and NY’s manufacturing index also missed investor expectations and that the report fueled concerns over the impact of slowdown in global growth. This is probably why the U.S. 10-year Treasury yields fell to its lowest levels since May 2013. Yikes!

The Greenback was the biggest loser in the forex arena, with EUR/USD jumping by 137 pips to 1.2809 and USD/JPY crashing to an intraday low of 105.33 before ending the session 84 pips lower than its open price. It also got slammed against the higher-yielding comdolls with AUD/USD rocketing to an intraday high of .8860 before closing at .8817, USD/CAD sliding by 115 pips to 1.1257, and NZD/USD rocketing by 140 pips to .7986.

Will the dollar selloff extend to the Asian forex trading session? We don’t have a lot of economic events on tap save for New Zealand’s business PMI and Australia’s MI inflation expectations. The former printed a reading of 58.1 against last month’s 57.0 figure while the latter showed a 3.4% rise against the previous month’s 3.5% uptick.

See also:

London Session Recap

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

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