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U.S. retail sales were in line with expectations with a 0.5% increase. Most of the gain was from a rise in gasoline receipts as prices have risen on the back of surging oil costs. Therefore, it isn't necessarily a positive for the economy if consumers have to pay more for their commute. However, we did see a pick up in clothing and a 1.3% increase in building materials which could be a sign that more construction activity is ahead. After an initial bullish dollar reaction we have seen the green back give back its gains as fears are growing that interest rates are on the rise and will limit the pace of a recovery.
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John Rivera is the author of Market Brief, Top FX Headlines, and Forex Trading Weekly Forecast on DailyFX.com.
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