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US data eclipses politics

The US dollar this afternoon is on a slight decline against the euro after weak retail sales data for June came out. According to the report, last month saw the retail sales index grow by just 0.4% month-on-month. This marks a 1% reduction from May’s value (1.4%). Meanwhile, the actual volume of retail sales showed modest gains of 0.5% month-on-month, down from 1.3% in May.

This report will be digested by the market over the next few hours, with trader attention now focused on the Putin-Trump summit. What each of the leaders say could have a significant effect on their countries’ respective currencies. We could see the EURUSD pair’s trading range expand to 1.167 – 1.175 by this evening.

GDP data from China was published this morning, which fell in line with market expectations to report a reduction in year-on-year GDP growth from 6.8% to 6.7%. This negative release most profoundly affected the Chinese commodities market, especially oil, as well as stock exchanges. Overall, this decline was expected, but things could get worse if the trade dispute with the USA heats up. This means that Chinese GDP growth could slow even further by the end of the year, which could lead to a correction on commodity prices.

Tomorrow morning, we can turn our attention to statistics from Australia and New Zealand.

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