Not a great start to the week for the US dollar, thanks to underwhelming data releases and sterling strength pushing the American currency down. First up this week, we had retail data which showed a slight decline on the expected figure and was the lowest for two months. Consumer inflation released on Wednesday also failed to give the US dollar any strength, as it displayed its first negative figure in seven months as the recent struggle in the Chinese economy had a knock on effect on the US economy.
Focus for this week however was on the US Federal Reserve interest rate decision last night and minutes that follow. As expected they decided to keep US interest rates on hold, even though they thought the US economy would grow at a faster rate than their previous forecasts, as the uncertainties in the world economy, especially China’s, made it very difficult to be confident that an increase would not derail the US economy. So we are back to the guessing game as to when they will increase interest rates.