Dollar falls, gold rallies on Retail Sales miss
A larger-than-expected move in US retail sales MoM sent dollar lower and gold higher. Find out how the miss affected interest rate expectations.
The US dollar weakened significantly against all currencies, particularly against the Swiss franc (USD/CHF) and the Swedish krona (USD/SEK). This move comes after the release of a key US data point - retail sales.
Key economic indicators: retail sales and gold
Recent data indicate a contraction in U.S. retail sales by 0.8% for January, suggesting a potential slowdown in consumer spending. Sales were only expected to shrink by 0.1% MoM, so markets quickly reacted to the data miss - sending US dollar lower. Additionally, gold prices have remained above the $2000 mark, a historically high level. Gold's price resilience reflects ongoing inflation concerns and economic uncertainties, important for traders monitoring safe-haven assets.
Interest rate speculation amidst economic data
Despite weak retail sales data, expectations for an interest rate cut at the upcoming May FOMC meeting have not significantly changed. This situation underscores the complex relationship between economic data releases and monetary policy decisions. Traders are closely watching these developments, as they can have a substantial impact on market conditions and asset values.
In 2024, the movement of the US dollar and market reactions continue to be heavily influenced by U.S. economic indicators. For traders, keeping abreast of these trends and understanding their implications is essential for making informed decisions in a fluctuating market environment.
How to trade US dollar
- Open an account to get started, or practice on a demo account
- Choose your forex trading platform
- Open, monitor, and close positions on USD pairs
Trading forex requires an account with a forex broker like IG. Many traders watch major forex pairs like GBP/USD and USD/JPY for potential opportunities based on economic events such as inflation releases or interest rate decisions. Economic events can produce more volatility for forex pairs, which can mean greater potential profits and losses as risks can increase at these times.
You can help develop your forex trading strategies using resources like IG’s YouTube channel. Our curated playlists can help you stay up to date on current markets and understanding key terms. Once your strategy is developed, you can follow the above steps to opening an account and getting started trading forex.
Your profit or loss is calculated according to your full position size. Leverage will magnify both your profits and losses. It’s important to manage your risks carefully as losses can exceed your deposit. Ensure you understand the risks and benefits associated with trading leveraged products before you start trading with them. Trade using money you’re comfortable losing.
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