Judging by the way that stock indices have advanced today on Wall Street, investors are discounting the importance of the day’s economic data because of the possible distortions that extreme winter weather may have had on the data.
Jobless claims and retails sales came in short of expectations earlier in the day. Jobless claims increased to 339,000, a rise of 8000 from the prior week. January retail sales slipped 0.4%, while December’s change was subject to a downward revision, amended to a 0.1% decline from the 0.2% rise that was reported last month.
There’s no way to know for sure how much of this is down to the weather, but it does seem likely that the unusually severe weather seen in much of the US this winter has distorted the data to some degree. With another winter storm hitting the east coast today, it may be some time before we will see reports without possible weather distortions.
Bad weather distortions or not, the softness in today’s reports has still hit the US dollar in the forex market, where it has weakened against all the major currencies. EUR/USD climbed 0.56% while the dollar slumped 0.73% against the Swiss franc and 0.37% against the Japanese yen.