Euro stuck after strong retail sales

The EUR/USD currency failed to find a direction in the American trading session after the US Department of Commerce revealed that Retail Sales had come in above analysts expectations and hit the market at 0.4% MoM, with July sales growing by 0.7%, while excluding Autos. The core retail sales numbers jumped 1 percent, well above predictions for a figure of 0.4 percent. Core Retail Sales correspond closely with the Gross Domestic Product (GDP) consumer spending component.

Following the data, some banks on Wall Street, like Goldman Sachs, revised their Q3 Gross Domestic Product (GDP) forecasts to a 2.2% annualized rate. The Atlanta’s Fed GDPNow model, which estimates GDP expectations, updated its model after Retail sales data showed GDP jumping to 5 percent from 4.1 percent foreseen on August 8.

Meanwhile, bets for a pause on hikes by the Federal Reserve (Fed) in September remain intact at 89% after the data but November paints a different picture and the market still sees a 70 percent chance of a rate hike from the US central bank

Other data from the US Department of Labor showed that Import and Export Prices rose above estimates. At the same time, the New York Federal Reserve revealed its Manufacturing Index plunged to -19, exceeding projections of -1, after business conditions improved in July.

Minnesota’s Fed President Neil Kashkari crossed the wires, expressing that inflation is still too high, even though he feels good about its progress while noting uncertainty about whether the Fed has done enough or needs to do more. He added US central bank officials are surprised by the economy’s resilience.