US dollar weakens “thanks” to poor data

The US dollar initially showed some strength yesterday morning – before sterling jumped nearly two cents to reach the 1.56 level.

The volatility affecting the dollar yesterday is mainly due to the down-and-out retail sales figures that were released at -0.3% – one percent lower than expected. This is a bearish outcome for the US currency, and reflects a poor level of consumer spending, which can ultimately drag down any sign of an early rate hike.