Dollar to hold onto recent gains barring a collapse in Retail Sales – ING
|The Dollar direction today will be determined by the US consumer. Economists at ING analyze Greenback’s outlook ahead of January Retail Sales data.
DXY to stay bid in a 104.50-105.00 range
We and the market are looking for some softening in the January retail sales figures today, but the consensus of a 0.2% month-on-month increase in the retail sales control group (from +0.8% MoM in December) hardly signals cause for alarm.
Barring a huge downside surprise in retail sales or a surge in initial jobless claims (to support the anecdotal news of rising US layoffs) we do not think the Dollar has to come too much lower. Subdued cross-market volatility is keeping interest in the carry trade alive and also benefitting the high-yielding Dollar.
We favour DXY staying bid in a 104.50-105.00 range.
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