Article Highlights

  • US PPI: 0.2% as expected vs. -0.5% previous
  • US core PPI: 0.2% vs. 0.1% forecast, -0.5% previous
  • US headline retail sales: 0.9% vs. 1.1% expected, -0.5% previous
  • US core retail sales: 0.4% vs. 0.7% expected, 0.0% previous
  • US headline retail sales: 0.9% vs. 1.1% expected, -0.5% previous
  • US NFIB small business index: 95. 2 vs. 98.4 expected, 98.0 previous
  • IMF downgrades U.S. growth forecasts
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The Greenback got triple roundhouse-kicked by forex traders yesterday, thanks to weak U.S. data and a downgrade by the IMF.

Uncle Sam’s retail sales report was under the spotlight yesterday and, while consumer spending rose for the first time in four months, its rate was lower than the 1.1% growth that market players had been looking for. It also didn’t help that small business activity fell to a nine-month low and U.S. Treasury yields fell by 2.7 basis points to 1.90%.

The straw that broke the camel’s back was the International Monetary Fund (IMF) downgrading its U.S. growth forecasts. The IMF now expects the economy to grow by 3.1% in 2015, down from its 3.6% initial estimate, while 2016’s figures were also revised from 3.3% to 3.1%.

Not surprisingly, dollar bears used yesterday’s data for momentum. EUR/USD shot up to an intraday high of 1.0707 before settling with an 86-pip session gain (+0.81%) at 1.0655. Ditto for GBP/USD, which saw a whopping 149-pip rise (+1.02%) to 14782.

The dollar even logged losses against its fellow low-yielding counterparts with USD/JPY falling by 44 pips (-0.37%) to 119.44 and USD/CHF sliding by 56 pips (-0.57%) to .9726.

Comdoll bulls were also firmly in the bandwagon with AUD/USD rising by 42 pips (+0.55%) to .7626, USD/CAD falling by 96 pips (-0.76%) to 1.2486 and NZD/USD popping up by 60 pips (+0.80%) to .7521.

Let’s see if Asian session forex traders extend the dollar’s losses. China is set to print its GDP, industrial production, fixed asset investment, and retail sales numbers at 2:00 am GMT. Analysts are generally expecting higher figures from last month, so keep an eye out for significantly lower numbers that might cause weaknesses for commodity-related currencies. If you recall, the Aussie, Loonie, and Kiwi all suffered early this week when China printed a worse-than-expected trade data.

Keep your eyes glued to the tube!

See also:

London Session Recap

Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.

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