Dollar falls, gold rallies on Retail Sales miss

A larger-than-expected move in US retail sales MoM sent dollar lower and gold higher. Find out how the miss affected interest rate expectations. Key points: - US dollar down against all currencies: (0:28) - US retail sales missed by 0.7%: (1:25) - Gold prices bounce off $2000: (2:20) - Rate cut in May still unlikely: (3:48) - Biggest moves in 2024 on US data: (5:10) The US dollar weakened significantly against all currencies, particularly against the Swiss franc (USD/CHF) and the Swedish krona (USD/SEK). This move comes after the release of a key US data point - retail sales. Key economic indicators: retail sales and gold Recent data indicate a contraction in U.S. retail sales by 0.8% for January, suggesting a potential slowdown in consumer spending. Sales were only expected to shrink by 0.1% MoM, so markets quickly reacted to the data miss - sending US dollar lower. Additionally, gold prices have remained above the $2000 mark, a historically high level. Gold's price resilience reflects ongoing inflation concerns and economic uncertainties, important for traders monitoring safe-haven assets. Interest rate speculation amidst economic data Despite weak retail sales data, expectations for an interest rate cut at the upcoming May FOMC meeting have not significantly changed. This situation underscores the complex relationship between economic data releases and monetary policy decisions. Traders are closely watching these developments, as they can have a substantial impact on market conditions and asset values. In 2024, the movement of the US dollar and market reactions continue to be heavily influenced by U.S. economic indicators. For traders, keeping abreast of these trends and understanding their implications is essential for making informed decisions in a fluctuating market environment.
This information has been prepared by IG, a trading name of IG US LLC. This material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. You should not treat any opinion expressed in this material as a specific inducement to make any investment or follow any strategy, but only as an expression of opinion. This material does not consider your investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. No representation or warranty is given as to the accuracy or completeness of the above information. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. See our Summary Conflicts Policy, available on our website.
Publication date:
2024-02-26 13:10:44 (GMT)

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