Posted on 03/11/2009 3:26:48 PM PDT by Lady GOP
US Dollar Takes Bearish Turn Lower - US Retail Sales Could Impact Risk Trends on Thursday
US dollar price action was primarily responsible for much of what happened throughout the forex markets on Wednesday, as the DXY index finally broke below critical trendline support, suggesting the currency is officially turning lower. There was little in the way of fundamental news for the US, but that will change on Thursday as the Commerce Department is forecasted to report that US retail sales fell negative for the seventh time during the past eight months in February, as deteriorating labor markets, tight credit conditions, and a year-long recession weighs heavy on the minds of consumers.
More specifically, advance retail sales are anticipated to have contracted 0.5 percent during the month, and excluding auto sales are expected to have slumped 0.2 percent, marking what may end up being a consistent trend through the first half of 2009. As we saw with US non-farm payrolls, the impact of a disappointing result may be mixed, as the Federal Reserve has already cut the fed funds target to a record low range of 0.0 percent - 0.25 percent and has no room to cut further. As a result, it will be important to gauge the impact of the news on DJIA or S&P 500 futures, as a sharp decline would signal flight-to-quality and US dollar strength, while gains would suggest a pickup in risk appetite and thus, US dollar weakness.
(Excerpt) Read more at dailyfx.com ...
Ahhh...the little pitter patter of the first steps to inflation.
No way!
It's just a little RWC fling that will pass soon. /s
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