Today the retail sales figure is due with investors eyeing a fall of -0.2% MoM. Although the figure expected is negative investors bet on a March rebound in sales as snow storms and harsh winter conditions are considered to be the factors behind the dented February sales. Since the credit crisis has erupted consumer spending once the main driver of growth for the US has remained rather subdued. However with the current stabilization of unemployment settling at 9.7% and the Nonfarm figure falling less than expected, investors hope consumer spending is on the rise and will return gradually to be the catalyst of growth in the US economy.
How is the figure expected to affect the FX market? Although a good retail sales figure is bullish for the US economy and bullish for the Dollar, the recent price action in the FX market where the risk currencies such as the Euro and the Sterling rebounded suggest risk appetite is resuming. In such a scenario a positive surprise in the figure could actually boost risk appetite and place additional bearish pressure on the Dollar. A worse than expected figure will not necessarily curb risk appetite as investors might attribute it to the harsh weather conditions.
Daily Forex Market Analysis provided by eToro
Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don’t trade with money you can’t afford to lose.