Market Snapshot – Stronger US Retail Sales Boosts the Dollar

UK CPI Data Slightly Weaker

There were a couple of big news scheduled to be released for the day and while one did not bring about much of a reaction, the other piece of data brought in the required volatility to the markets. We had the inflation data from the UK which came in at a slightly weaker than expected value of 2.6% which basically means that the BOE would not be in a position to think about rate hikes anytime soon. Already, the BOE was reluctant to announce any such drastic measures just when the UK is going through the uncertain Brexit process and with the data also not cooperating, it has become pretty much clear that the BOE is not going to hike rates. Though this did not bring in a immediate bear reaction in the pound, the simmering underneath was there for everyone to see.

Strong US Retail Sales Boosts the Dollar

The news that broke the back of the pound and helped the dollar to recover further was the retail sales data from the US. This was the most important piece of economic data from the US apart from the NFP and the CPI data and this came in at a stronger than expected value of 0.6% and this helped the dollar bulls to brush aside the disappointment of the bad CPI data and led to a bout of buying of the dollar which helped it to recover across the board and push the pound down even further.