The US dollar had a better day yesterday, making up for lost time on Monday by gaining against the majority of its partners. This came despite a lack of data from stateside, with the dollar taking its lead from the bigger worldwide picture. The US currency made notable ground against the weakened sterling and the euro, who also showed signs of economic weakness. As such, investors’ beliefs that the US is in a more suitable position than others to perform during a wider slowdown helped push the currency higher.
Today brings the first significant data from the US, with a dual release later this afternoon. The retail sales figure is due, alongside an inflation indication in the form of a Producer Price Index (PPI). Given the slow start to the week in terms of physical releases, investors will be sure to scrutinise these figures as they look for support for this speculation. Good results could help maintain the dollar’s recent form, while smaller pieces including the Empire State manufacturing index could add to the market reactions.